Iran's auto industry slips into recession as disagreements grow
Serious differences remain in place between auto-parts makers and carmakers of Iran and that further worsens the situation of Iran's depressed automotive industry, an automaker told Trend.
The vice-chairman of the board of directors of Iran's Rakhsh Khodro Diesel Company, Akbar Mirza-Hosseini, believes that carmakers' outstanding debts to auto-parts makers is among the main reasons for disagreements between the two main sectors of the country's automotive industry.
"Over the past several years and due to the imposed sanctions Iranian auto-parts makers had very limited opportunities to work with international companies. Therefore, the auto-parts makers dedicated a large part of their capacity to the country's two giant carmakers (Saipa and Iran Khodro) in order to resist the difficult economic situation which eventually led to lower quality of the final product," Mirza-Hosseini said.
"On the other hand, some auto-parts makers imported auto-parts from China and India and sold those products to carmakers through their own brands. Automakers have partially learnt about the fact," he added.
Earlier Arash Mohebbinejad, secretary of the Iranian auto-parts makers union said that $700 million worth of auto parts are annually imported into Iran through legal channels, while $400-$500 million worth of parts are smuggled into the country.
According to the union member, car part manufacturing units in Iran are currently working at 50 percent of their output capacity due to the crisis in the country's automotive industry.
Arash Mohebbinejad further said that the automakers have to pay about $557.2 million (17 trillion rials) to settle their debts to auto-parts makers.
---
Follow us on Twitter @AzerNewsAz