French auto companies are gradually making a comeback to Iran (PSA Group, Renault) and now one of the largest French inspection and testing firms is set to offer services to local businesses.

In a talk with the Financial Tribune, the inspection, testing and certification agency, Bureau Veritas said it is expanding its services to automotive industries in the country.

Head of the local automotive department, Mehdi Parvini said the company is in talks with auto parts makers and car manufacturers. “The main services offered by BV in this sector include providing local parts manufacturers with E-mark certificates and issuing conformity of production licenses to automakers.”

The agency already sells services to private and state-owned businesses in diverse fields of industry and commerce. For instance, ships cannot dock at international ports without safety and environmental standards verification. BV is issuing such verifications to Iranian businesses.

BV had a long history of presence in Iran before the international sanctions were tightened in 2012 over the nuclear dispute. The restrictions, mostly imposed by the western world, were eased last year.

International Integration

The E-mark is a United Nations stamp for approved vehicles and components sold into the EU and some other countries under United Nations Economic Commission for Europe Regulation 10. In addition to the EU countries, the E-Mark licenses ease exports of vehicles and parts to other destinations.

Parvini says, “BV has authorization from European governments and can evaluate auto parts and prepare test reports needed for official approval.”

Furthermore, the agency can issue Type Approval certificates which legally acknowledge that a product is in full compliance with the relevant standards and regulations.

During the past few months, Iranian automakers have signed joint venture deals with foreign carmakers, including PSA Group and Renault.

With the declared policy of increasing automotive exports, the government in Tehran has said that 30% of vehicles or auto parts produced under the JVs should be exported through the foreign company’s overseas sales networks.

Without the E-Mark and Type Approval certificates, the foreign companies jointly producing cars in Iran will not be able to export to the EU and other markets.

Furthermore, after acquiring the certificates auto parts manufactured in Iran can be used in the foreign firms’ production plants in other countries. For instance, apart from 22 plants in Europe, Renault has 14 auto factories in South America, Africa, and Asia. The certificates provided by BV are valid in all continents. Cars produced with Iran-made auto parts can be sold in the global market.

Quality Job

One of the other services offered by BV in Iran is Conformity of Production. CoP is a means of verifying the ability to produce a series of products that exactly match the specification, performance and marking requirements outlined in the type approval documentation.

An official document published by BV’s Iran branch states that as well as providing testing services for new cars, the company can also inspect damage to new vehicles throughout the supply chain on behalf of carmakers.

Other services that the agency is set to propose to the expanding auto industry include vehicle inspection service (presently offered by Iran Standard and Quality Inspection Company), vehicle damage tracking, vehicle stock control, and damage evaluation.

In the subject of BV’s relations with ISQI, Parvini said “After we set up offices in Tehran the two companies have been in contact. However, so far no framework  for collaboration has been devised.”

ISQI is a private company that conducts monthly quality and safety tests on behalf of the Ministry of Industries, Mining and Trade. In recent months ISQI has  become the talk of the town because it was authorized by the government to put a permanent end to the production of all low-quality cars that contribute generously to air pollution and unacceptably high levels of gasoline consumption.

While the assertive and effective presence of standard and inspection companies in Iran’s huge automotive sector can be regarded as a harbinger of change, it remains to be seen to what length these companies can and will go to take on the questionable and dysfunctional managerial structures of the car companies, namely those affiliated to the state and its organizations.