Motorcycle Production Falls 60% in First Five Months of the Year / Heavy Shadow of Logistical Restrictions on Motorcycle Production Lines

Mahdieh Ahmadi, Secretary of the Motorcycle Industry Association, speaking about production volume in the first half of the year, said: About 181,000 motorcycles were produced in the first five months of the year, compared with 300,000 units in the same period last year. This shows that production volume has fallen by 60%. The post "Motorcycle Production Falls 60% in First Five Months of the Year / Heavy Shadow of Logistical Restrictions on Motorcycle Production Lines" first appeared on Safir Arjan.

According to Ambassador Arjan, while the country's motorcycle market has experienced relative prosperity due to the increase in car prices and the arrival of new demand (including women), it is now facing serious challenges in the field of parts supply and exchange rate fluctuations. A situation which, according to trade union activists, has made the continuation of production face risks.

While the second half of the year is usually the recession season of this market due to the cold weather, the price changes in the automobile field have increased the demand for this vehicle.

According to the strategy of the Ministry of Safety, motorcycle production is focused on 4 high-circulation platforms / the continuation of the production flow depends on the timely supply of imported parts, which faces sanctions challenges.

Bahman Ziamaghadam, the secretary of the country's motorcycle industry association, expressed his concern about the future of production and supply of raw materials and told Ambassador Arjan: According to the strategy of the Ministry of Industry, Mining and Trade (Samat), production is focused on 4 high-circulation platforms.

He added: Currently, on average, 50% of the parts of these 4 platforms have been internalized. Parts whose production is not economically viable or are not allowed to be produced by parent companies due to license restrictions are imported as CKD.

He continued: parts such as trunk, tires, etc. are now completely produced inside, but the continuation of the production flow depends on the timely supply of imported parts, which is facing sanctions challenges.

Currency allocation is one of the main bottlenecks of the motorcycle industry / the currencies paid in 1404 were related to the requests of the first half of the year or the arrears of the previous year.

The secretary of the country's motorcycle industry association considered currency allocation as one of the main bottlenecks of this industry and clarified: the currencies paid in 1404 were related to the requests of the first half of the year or the arrears of last year. This limitation has become more apparent in the current situation and due to the blocking of some entry points and sea transportation challenges.

The stock of small production units is responsible for a maximum of 2 months of production and large units for a maximum of 4 months

Emphasizing that the stock of small production units is responsible for a maximum of 2 months of production and large units for a maximum of 4 months. A significant part of the ordered shipments have remained undecided on the water.

Pointing out that the main source of import of parts is China, Malaysia, Indonesia and India, Ziamghadam pointed out the increase in logistics costs and said: "Earlier, parts were directly imported into the country's ports, but now we have to use intermediate routes like Pakistan, which in addition to the difficulties of the route, the increase in import and export duties in these countries has increased the cost of production."

When a motorcycle is sold at a price of 170 million Tomans, but in a short period of time its value reaches 270 million Tomans, the manufacturer faces a definite loss in case of installment sales.

Explaining the sales situation in the market, this trade union official also said: Previously, producers used to hand over their products to sellers or buyers in installments with a return period of 6 months, but due to the extreme fluctuations in the exchange rate, this procedure has been met with caution.

The exchange rate fluctuation depreciates the working capital of producers and practically deprives them of the ability to reproduce.

In the end, the secretary of the country's motorcycle industry association stated: When a motorcycle is sold at a price of 170 million tomans, but in a short period of time its value reaches 270 million tomans, the manufacturer faces a definite loss in case of installment sales. This exchange rate fluctuation depreciates the working capital of producers and practically deprives them of the ability to produce again, which will ultimately lead to tension in the market and decrease in supply.

In the first 5 months of the year, about 181,000 motorcycles were produced / this number was 300,000 in the same period last year / in the second 6 months of the year, the amount of production cannot be more than 120,000 motorcycles.

About the production volume in the first half of the year, this union official said: In the first five months of the year, about 181,000 motorcycles were produced, while this number was 300,000 units in the same period last year. This shows that the production rate has dropped by 60%.

The secretary of the country's motorcycle industry association said about the production forecast in the second 6 months of the year: According to the production statistics in the first 5 months of the year, it is predicted that the production amount cannot be more than 120 thousand motorcycles.

Before the amendment of Article 10 of the executive regulations of the organization of the automobile industry, the certificate of scrapping for motorcycle manufacturers was 3 million tomans, and with this amendment, this amount has reached 22 million tomans.

Continuing his speech, he complained about the amendment of the executive regulation of Article 10 of organizing the automobile industry, and said: Before the amendment, the scrapping certificate for motorcycle manufacturers was 3 million tomans, and with this amendment, this number has reached 22 million tomans, which will definitely be imposed on the consumer.

Referring to the request of the motorcycle industry manufacturers, Ziamghadam continued: The association has requested the revision of this amendment to the custodian institutions, and we hope that the matter will be handled by experts.

According to Ambassador Arjan, based on the approval of the Council of Ministers, in the implementation of Note (2) of Article (10) of the law, car and motorcycle manufacturers in the country are required to receive an equivalent car or motorcycle scrapping certificate from the scrapping center for every 4 cars or motorcycles produced. The numbering of cars and motorcycles is subject to the submission of scrapping certificates by car manufacturers and motorcycle manufacturers equivalent to twenty-five hundredths (0.25) of monthly production, which scrapping centers are obliged to provide scrapping certificates requested by car and motorcycle manufacturers.