Foreign carmakers must use Iranian car parts if operate in Iran

Business Materials 25 April 2016 18:59 (UTC +04:00)

Baku, Azerbaijan, Apr. 25

By Fatih Karimov - Trend:

Iran's Industry ministry has obliged foreign carmakers to allocate a 20-percent share for Iranian-made car parts if they want to operate in the country's market, Arash Mohebbinejad, the secretary of the Iranian Car Parts Manufacturers Association, said.

In a bid to support national car part making industry, the ministry also has obliged the Iranian car makers to buy 40 percent of the parts used in production from domestic market, Mohebbinejad said, ILNA news agency reported Apr. 25.

He further said that Chinese carmakers are resisting the ministry's decision, expressing hope that Iran's Industry ministry would not withdraw.

Mohebbinejad also said that Iran's car output should reach three millions per year by 2025 according to the country's major economic development plan.

Iranian car part makers also should produce $6 billion worth of car parts by 2025, he added.

Mohammad Baqer Rejal, head of the Iranian Car Parts Manufacturers Association, said earlier that the country's auto manufacturers owe $2.3 billion to the factories that manufacture car parts.

He added a great part of the debt was accumulated in the past few months as only four months ago the debt stood at $1.6 billion.

Only 15 to 20 percent of auto parts cannot be produced inside Iran which is due to the fact that launching their production lines is not economically beneficial - they mostly include electronic parts, he said.

Iran's car output during the last fiscal year(ended March 20) decreased by 13.7 percent compared to the same period of the preceding year and stood at 976,836.

Iran produced 989,110 cars in 2012, which made the country Asia's eighth largest car manufacturer. Iran also stood at the world's 18th place in the mentioned year.

The Islamic Republic's car output faced a 40-percent decrease in 2012 due to sanctions. The country was Asia's fifth largest car manufacturer in 2011, with a total output of 1,648,505.