Iranian parliament discusses mismanagement in auto industry

Photo: Iranian parliament discusses mismanagement in auto industry / Politics

Tehran, Iran, Jul. 21

By Milad Fashtami - Trend:

Iranian parliament (Majlis) has carried out a special study of the performance of the country's carmakers.

The report was read at parliament's Sunday meeting, Iran's ISNA News Agency reported on July 20.

The document reads that the auto industry is Iranian economy's second largest sector, next to oil and gas industries. Some 200 trillion rials (some $6.45 billion) is being circulated in the auto industry each year. The sector creates 500,000 direct and indirect job opportunities annually.

Iran was the world's 12th largest car manufacturer in 2011, but the country's output decreased in 2012.

The document also reads that the country's giant carmakers, Iran Khodro Company (IKCO) and SAIPA Company, have repeatedly blamed lack of liquidity for the sharp decrease in their output. But none of them have made any serious effort to cash around 80 trillion rials (some $2.58 billion based on the exchange rate of USD at the free market) of their customers' unpaid debts.

"The value of uncompleted cars which are piled up in numerous parking lots is around 18 trillion rials (some $580.6 million)," the report said.

The report further suggests that IKCO and SAIPA are suffering from mismanagement, noting that "the companies have been derailed from their original function."

"The automakers are working with less than 50 percent of their capacity. SAIPA has appointed many advisors and directors without having the necessary skills and requirements," it said.

The document also reads that the Iranian carmakers are importing low-quality part from foreign countries, ina particular from China, with the hologram of Iranian parts manufacturing firms.

"The auto industry was once profitable, but it has experienced a falling trend since 2002 and is now considered a loss-making industry," the report said.

Iranian MPs say the price of cars in Iran is 30 percent more than the real prices.

Some 223,023 cars have been produced in Iran in the first quarter of the current calendar month (March 21 - June 20).

The figure shows 79.8 percent increase compared to the same period of time previous year, Iran's TASNIM News Agency reported on July 2.

Sedan cars accounted for 189,849 percent of the mentioned amount, some 78.5 percent more than previous year.

Iran also produced 30,986 pickup trucks, 2,089 trucks, 40 buses, and 14 minibuses in the mentioned period.

Follow us on Twitter @TRENDNewsAgency