Iran has no choice but privatization of car industry

According to The Iran Project, last year, Iranian President Ebrahim Raisi, during an unexpected visit to Iran Khodro Company (IKCO), brought up the issue of handing over automobile manufacturing companies to the private sector and announced it in an eight-point order.

Since then, more than a year and a half passed but the President's order has yet to be implemented and we are witnessing no tangible changes in the status of the Iran Khodro and Saipa (Iran's largest and second-largest carmakers).

It is worth mentioning that after several trade-offs, the government's direct share of the ownership of these two car manufacturers has reached "5.72% in Iran Khodro" and "16.82% in Saipa".

In November, the Privatization Organization objected to the on-exit of government managers from automobile factories and announced that this organization considers itself obliged to follow up the withdrawal of the government from the management of Iran Khodro and Saipa automobile companies.

Also, this organization stressed that it will use all the legal tools within its authority to remove government managers from automobile manufacturing companies.

We would follow the handover process based on principles and in accordance with national interests, which will pave the way for sustainable development of the local carmaking industry.

Will the automakers be freed from the government's trap?

But it seems that handing over the state shares of car manufacturers will not save them from being stuck in the government trap.

To this end, Iran's Parliament Research Center announced in a report that the issue of privatization of the car industry is not so simple.

The report says that even if the shares that are officially owned by the government in the automobile industry are transferred, the country's two largest automobile manufacturers can still be considered government-owned.

Saeed Madani, the former CEO of Saipa Automobile Group, stated that the government now appoints the managers of the automobile industry, saying, "In addition, the government imposes human force on the automobile manufacturers."

"It can be said that the presence of the government in automobile factories is mostly political because if the automobile factories were independent, they could file a complaint against the intervening institutions in response to the government's meddling."

For the growth of automobile factories, they should be treated as a private sector; It means that the government should be the owner, but instead of interfering, it should only act as a superviser.

Translator : Fatemeh Khoshroo