Unreasonable variety of car models / people pay the price of wrong policies!

While the Iranian automobile industry is facing challenges such as embargo, limited supply of parts and reduced purchasing power of consumers, excessive variety of models and low circulation of production has also become one of the obstacles of economic production; An automobile expert believes: the root of this situation should be found in macro-politics, indiscriminate issuance of licenses and the expansion of automobile companies. Post Unreasonable variety of car models / The price of wrong policies

According to Ambassador Arjan's report, Amirhasan Kakaei, referring to the pressure of sanctions on the automobile industry, said: The automobile industry has been struggling with restrictions caused by foreign sanctions and internal challenges for years. The fact is that domestic car manufacturers currently do not have a direct relationship and contract with the main Chinese companies, and transactions are carried out through intermediary companies, and the news of sanctions against some of these intermediaries has also been published.

He added: The new sanctions should not be seen separately from the set of economic pressures. Restrictions will first occur in sea transportation routes, then in air, and then even with the possibility of disrupting land trade routes, which will affect the entire economy, including the automobile industry, in addition to directly affecting the currency market. Although the automobile industry has been able to survive to some extent due to the ability of internalization, the import of parts on an industrial scale faces serious risks and the continuation of these disruptions makes production more difficult. On the other hand, the stagnation of the market and the decrease in the purchasing power of real applicants have caused the effect of currency fluctuations and production decline to be different from the past patterns and directly fuel the growth of prices.

In response to a question about the unusual variety of models and the low depth of internal manufacturing, this auto industry expert considered the root of the problem in macro-politics and clarified: the excessive variety of cars and the low circulation of models is not only the result of the decision of car manufacturers, but is the result of frameworks such as laws to improve the business environment and organize the auto industry and issue excessive operating licenses.

Kakaei said: The expansion of companies under titles such as production without factories for an industry such as automobile manufacturing, which requires a stable supply chain, responsibility in production and after-sales services, is not responsible and only leads to a waste of resources.

Referring to the issue of the common platform and its precedents in the country, he said: "The common platform is one of the logical solutions for reforming the structure, but it is not possible to achieve it with government orders and coercion." The experience of past projects such as the L90 or the simultaneous use of the TU5 engine showed that without the formation of real common interests, not only sustainable cooperation is not formed, but negative competition among car manufacturers has led to increased costs and does not bring benefits to the end consumer.

This auto industry expert emphasized: In order to overcome the current situation, the policy maker must stop the excessive expansion of actors, amend the disruptive laws and provide the basis for strategic cooperation between companies. Automobile manufacturers can also go towards economic production without the need for full legal integration, in the form of strategic partnerships and specific division of labor.

At the end, Kakaei pointed out the global experience of merger and restructuring of car manufacturers: after the financial crises of the 1990s in South Korea, the government of this country provided the context for restructuring, accepting the bankruptcy of inefficient companies and focusing on creating large and competitive groups. In Iran too, if we are looking for the resilience of the supply chain against sanctions and increasing the depth of domestication, we have no other choice than real privatization, justifying the scale of production through consolidation and radical reform of the ownership and policy structure.