R&D could save Iran’s car industry

Given the new measures taken by Iran’s carmakers in the area of research and development, local auto manufacturers will be able to export a third of their products by the end of the 20-Year National Vision Plan (2005-25), said the minister of industries, mining and trade.

Mohammad Reza Nematzadeh made the statement on Sunday during a visit to the research and development facilities of Iran’s second largest automaker SAIPA, IRNA reported.

The minister said this goal can be achieved with increased attention and dedication to expansion of R&D and by using new car platforms that meet international standards.

“To save Iran’s auto industry, the minister said that more emphasis should be placed on R&D. To this end, auto parts makers must also draw on the latest international know-how in the areas of production,” he said.

“Universities and industries must expand cooperation so that drawbacks in the area of production may be addressed.”

The minister said trade, and specifically exports, must expand and this will come about by knowing the major competitors in the field and acquiring a deep grasp of the preferences of customers on an international level.

He added that aside from setting up R&D facilities, car makers must launch international market studies units and advance research in this regard.

According to Nematzadeh, SAIPA has shown great dedication to developing research-based activities and upgraded its labs while advancing technical and mechanical activities at its research centers.

The minister added that the advances are a result of SAIPA working with international business partners.

“In collaboration with several European business partners, SAIPA has launched new control and safety tests,” he said, while noting that the company’s production standards have also improved.

Nematzadeh also projected that new cars produced by SAIPA as per the new standards will be available on the market by the end of the current Iranian year (March 20, 2016).

The minister noted that SAIPA has announced plans to release two new cars in the next two years produced on new platforms and the ministry has been pressing the carmakers to move the deadline forward by six months. None of the models was named by the minister.

“Last year, SAIPA implemented structural reforms and expanded cooperation with universities and prominent foreign auto firms, because of which we expect the company to launch new and improved models in the coming years,” he said.

The models Tiba 1, Tiba 2 (hatchback) and Saina are great achievements for SAIPA, as the cars were made in a period when Iran was cut off from international markets due to the western-imposed sanctions.

Nematzadeh noted that 1.7% of the revenues from SAIPA’s sales are allocated to the company’s R&D center and added that this share should increase.
“Investing in R&D will result in better production quality and prepare us for manufacturing cars that can be exported and sold on international markets,” he said.

During this visit, SAIPA’s CEO Mehdi Jamali said the company’s policies have always been to produce low-budget vehicles and the same set of standards will be observed in the production of new models.

He noted that over the past few years, SAIPA has spent over $40 million on R&D.

The CEO further said the company has carried out extensive research in Africa’s car market and will be setting up a production plant in Algeria to produce 20,000 units annually.

“The plant will start operating next year,” he said.

Jamali had previously said that by the end of the current Iranian year (March 20, 2017), the company intends to increase auto production from 300,000 to 530,000 units while noting that this could help reduce the company’s overhead expenses.

By Financial Tribune