Government - main obstacle for privatizing Iran's auto industry

Tehran, Iran, March 2

By Mehdi Sepahvand - Trend:

On March 2, Iranian President Hassan Rouhani called for privatizing the country's auto making industry, which has suffered a lot through the years, including from the sanctions imposed on Iran.

High tariffs on imported cars and governmental support behind big factories, which by the way are more of assemblage plants, have made the competition meaningless for years, forcing people to buy a limited variation of cars that have been flooding the market for decades.

Acting on the best of intentions, the government led things to where they are, yet surprisingly, Rouhani was the one to criticize the country's policy over the past decades and urged all officials involved in the car making industry to make efforts to satisfy the customers.

"We cannot close the doors and make people buy home-made cars," Rouhani said.

If by saying so Rouhani has detached himself from the professional position and expressed a public hope, there are a number of issues worthy of attention if one means to find a way out of the situation.

First of all, the government needs to abandon supporting present giant car makers the way it's used to.

If it weren't for governmental help in times of crisis, big factories such as Iran-Khodro or Saipa would not have endured so far, Ruhollah Talebi, faculty member at Iran University of Science and Technology, School of Automotive Engineering, told Trend March 2.

"Want it or not, to be able to compete in the world we need privatization. If tariffs on imports were somehow moderated, then you could see none of the cars present in the market attract people. And we need to be a giant world car maker if we want to go on," he noted.

"However, this is not an overnight job. Overnight actions will damage the country. The government needs to offer support, but a soft, long-term one; and it comes with great cost. We should see in what areas we have privileges. Maybe we could be good part makers and should abandon making cars altogether," he said.

However, privatizing the industry is not easy. First of all, the two big car makers in the country have million of employees. One little disturbance in their business will cause great labor crisis. If the government doesn't cover this, great social crisis will emerge.

In late 2015, when a months-long viral social campaign against the Iran-made cars brought the local car-making industry to its knees, the government offered loans to encourage people to buy cars from companies that had a decrease in production.

The other problem is the overwhelming influence of the leading car makers throughout the country.

"If we do not care, we will once more undergo the bitter experience of the past," Talebi underlined.

What was summarized above may seem to be no more than a couple of factors hindering privatization of the auto industry in Iran, but to eliminate them in the business atmosphere means having to handle so many convoluted and inter-related facts that only a well-organized, country-wide effort is needed to reach the point so desired by all, or at least most in the country.

Mehdi Sepahvand is Trend's correspondent in Tehran, Iran

Turkmenistan's GDP increases in 1H2020
Turkmenistan's GDP increases in 1H2020
Georgian National Bank takes measures to support tourism sector
Georgian National Bank takes measures to support tourism sector
Central Bank of Azerbaijan to hold deposit auction
Central Bank of Azerbaijan to hold deposit auction
Loading Bars
Latest
Turkmenistan's GDP increases in 1H2020
Tokyo new coronavirus infections over 100 for third day
Seven police hurt in violence at London music event
Europe to supply Asian countries with olive products through Georgia
Georgia reports new cases of coronavirus
Brazil health regulator Anvisa allows Chinese COVID-19 vaccine trial
Kazakhstan's import of Canada-made goods nearly twofold down
Armenia violates ceasefire with Azerbaijan 42 times
Azerbaijan's SOCAR Polymer planning to produce next polypropylene batch
Aeromexico shares rise for second day despite missed debt payment
Kazakhstan’s oil producing company to buy pipes via tender
Kyrgyzstan’s COVID-19 cases reach 7,094
Kazakhstan confirms 1,644 new coronavirus cases over past 24 hours
Israeli PM asks citizens to follow COVID-19 restrictions due to surge in morbidity
Air France set to cut more than 7,500 jobs
Turkey nearly halves leather export to Uzbekistan
Iran cuts import of electrical goods from Turkey
Iran among top three countries in world for caviar producing, sturgeon farming
Brazil reports over 1.5 mln COVID-19 cases, with 63,174 deaths
Geostat reveals producer price indices for services in Georgia
Chinese mainland reports 3 new confirmed COVID-19 cases
Japan's Cokey Systems talks its activities in Uzbekistan
4 dead in small plane crash in Utah mountains
Global coronavirus cases rise to more than 11 million
4 injured in shooting at shopping mall in U.S. Alabama
U.S. South Carolina reports 20.7 pct positivity rate from new coronavirus tests
Export of Turkish chemicals to Uzbekistan declines
Geostat: Georgia increases fruit exports
Mexican soldiers kill 12 in cartel clash near border
Iran says to announce cause of nuclear facility "incident" at "appropriate time"
4 killed, 108 wounded in fireworks factory blast in NW Turkey: ministers
Brazil set to pass 1.5 million coronavirus cases, cities reopen anyway
Zarif writes to Borrell on EU's noncompliance with JCPOA
WHO sees first results from COVID drug trials within two weeks
Number of job seekers from Turkey to Kazakhstan increasing
Spain registers rise in new COVID-19 cases in past week
Saudi-led coalition intercepts 4 bomb-laden drones
Switzerland to open borders for Georgian citizens from July 20
Over 400 beat COVID-19 in Kazakhstan
Turkey reports 1,172 new COVID-19 cases, 203,456 in total
Official talks use of RES by private companies in Kazakhstan's Karaganda
Pakistani foreign minister tests positive for COVID-19
Hungary's parliament adopts 2021 budget
Israel reports 1,008 new COVID-19 cases, 28,055 in total
Russia leading among importers of Azerbaijani fruit, vegetables
Azerbaijan launches pilot project for breeding highly productive species of livestock
TPAO to continue conducting oil, gas exploration in 2 Turkish provinces
TABIB discloses number of infected people in Azerbaijan’s Nakhchivan Autonomous Republic
Assistant to Azerbaijani president: List of spheres affected by pandemic to be amended
TABIB: Azerbaijan begins to conduct serologic tests
Georgian National Bank takes measures to support tourism sector
Assistant to Azerbaijani president: Those infected people who leave houses - criminally liable
Turkmen company plans to increase harvest of vegetables
Central Bank of Azerbaijan to hold deposit auction
Five-month cargo shipment volume via Turkish Mersin port disclosed
Turkey bans entrance of Kazakhs as anti-COVID quarantine extended
Fitch estimates Georgia Global Utilities regulated water revenue
Aztelekom develops project to improve quality of services in Azerbaijani districts
Kazakhstan starts exporting locomotives to Moldova
PETRONAS Carigali in Turkmenistan opens tender for purchase of high-speed ship
Azerbaijan records growth in export of its products to Switzerland
Erdogan: Some countries' statements on Hagia Sophia - direct interference in Turkey's internal affairs
Data on maritime cargo transshipment from US via ports of Turkey announced
Plastic cards number grows in Kazakhstan year-on-year
Info on cargo shipment from Iran via Turkish ports disclosed
Daimler's Mercedes-Benz to streamline global production network
Georgian citizens traveling to Latvia not be placed under mandatory quarantine
Azerbaijan Hotel Association eyes restoring work in post-pandemic period
Russia's Tatneft opens tender for construction, installation work in Turkmenistan
Iran's export to Kuwait declines
Oil demand won’t get back to pre-crisis growth trend for some years
Azerbaijan confirms 583 new COVID-19 cases
IOM assists Turkmenistan in developing counter-trafficking plan
Azerbaijani Cabinet of Ministers approves resolution on toughening quarantine regime
Revenues of Georgian Vannilla Sky decrease
Transport cooperation between Lithuania, Kazakhstan growing despite COVID-19 pandemic
Kim Jong Un says North Korea prevented coronavirus from making inroads
Azerbaijani president sends letter to US conterpart
Raw milk prices increase in Georgia
CAERC talks current operational balance of Azerbaijan
Georgia building new highways
Azerbaijan, Indonesia to sign energy memorandum
Volume of five-month cargo transshipment from UAE via Turkish ports disclosed
Kazakhstan, Uzbekistan agree on co-op in water resources area
Georgia effectively monitors land borders
Kazakhstan's export to South Korea decreases
WB to support sustainable development of beef production in Kazakhstan
Data on cargo movement from Greece via Turkish ports announced
Turkey's export to D-8 countries drops compared to last year
TANAP Natural Gas Transmission Co. sees increase in current assets
Total assets of Azerbaijan’s Bank BTB grow
Thailand's main airport offers rapid coronavirus test for international arrivals
Azerbaijan supports entrepreneurs’ existing loan portfolio
Revenues of TANAP Company up
Azerbaijani, Russian experts highlight economic perspectives of North-South strategy
Macron names Jean Castex as prime minister in government overhaul
Volume of cargo shipment from China via Turkish ports revealed
Industrial production surges in Azerbaijan
Uber widens taxi app to Japan's Tokyo but ride-sharing still barred
Large harvest of potatoes, onions expected in Turkmenistan
All news