Expert: Suspending Pride, Peugeot production in Iran not logical
Tehran, Iran, Sept.3
Suspending production of two domestic car brands in Iran is not in the interests of the country, board member of Iran Auto Parts Manufacturers Association Mahmoud Najafi Sohi told Trend.
Sohi was commenting on the latest statements of Reza Rahmani, Minister of Industry, Mine and Trade on halting production of two vehicle production lines (Pride and Peugeot 405).
"It seems the Minister of Industry, Mine and Trade commented on the issue under pressure of press and MP's, since in the current situation this attempt is neither logical nor in the interest of the country," he said.
"Auto production volume has currently dropped from 1,600 million to 800,000 vehicles and recently two auto makers Iran Khodro and SAIPA have started montage of French and Chinese cars. Also, the foreign currency problem remains, and the auto part makers and manufacturers are having their share of problems as well," he said.
"Despite the problems automakers are not downsizing work force, and workers' salaries have increased from 10 million rials (about $238) to 20.5 million rials (about $595) in the current Iranian year (started March 21, 2019). How can one think of halting production in this situation," he indicated.
"The price of all raw materials including steel sheet have increased 100 percent therefore we should not expect auto price cut," he said.
"In my opinion the decision to halt production is not right, first an alternative should be found," he said.
Sohi also noted that while the payments for made cars can be completed within six months after purchase, auto part makers are buying steel sheets for cash.
"This kind of suggestion needs a 2-year planning, so that there would be substitute models," he said, adding that unfortunately due to sanctions, this idea was never realized.
At the same time, while Peugeot 405 or Peugeot 206 were being produced, it was expected that they would go for export, but it didn't happen, and all of these cars remained on the domestic market, the official said.
"Unfortunately, French Peugeot can stop working with Iran whenever it wants. It has already left Iran once. We tried to bring them back, but the negotiations fell through. So, cooperation with them cannot be relied upon," Sohi said.
"Many vehicles are old and it was expected that the production reaches 2.5 million, to substitute old vehicles in the country, and that there would also be investments made, but the plan didn't materialize," he said.