Removal of command pricing a must

According to The Iran Project, it has been more than three decades since the automobile industry resumed its activities following the victory of the Islamic Revolution. However this industry suffers from many structural problems at different levels despite its short history.

In such a way these issues have caused the ecosystem of the automobile industry in Iran to not be ready for the production of high-quality and high-tech cars. In addition to the backwardness of the automobile industry in the world markets compared to other competitors in the international arena, it created a lot of dissatisfaction in the country, as well.

In other words, it is crystal clear that the country's automobile industry is facing many challenges including inefficiency, variety and low quality of products, customer dissatisfaction, defective ownership and management structures, lack of common understanding between decision makers and the main stakeholders of the market and the automobile industry.

Unfavorable financial situations, accumulated losses, and debt of automaker companies are among the results of making wrong decisions and these challenges.

Monthly growth of 4,000 billion tomans in automobile manufacturers' loss

Currently, according to the Codal (the Securities and Exchange Organization’s information portal) , the state of accumulated losses of automobile companies is more than 160,000 billion tomans and about 4,000 billion tomans is added to this figure every month.

According to many experts, this situation is caused by the command pricing and being the state-owned of the country's automobile industry.

On the other hand, the state-owned condition of car manufacturers is considered to be another important factor in their losses, despite that last year, the president ordered the privatization of automobile manufacturers.

Contradictory statistics of loss figures by car manufacturers

In a meeting with the managers of Iran Khodro Company, Industry Minister Abbas Aliabadi announced the amount of accumulated losses of automobile companies until the end of this summer 97,000 billion tomans.

But in November of this year, Farhad Behnia, the spokesperson for the Iranian Auto Parts Manufacturers Association, had said, "Today, the car industry has accumulated losses of 200,000 billion tomans, 180,000 billion tomans bank debt, 50,000 billion tomans debt to parts manufacturers, and 20,000 billion tomans debt purchase to parts manufacturers.

He described the Competition Council as the main cause of this situation and emphasized that not only the car industry should join the stock market, but also the pricing should be offered by the companies.

Previously, many experts have announced that car manufacturers lose 183 billion tomans a day.

According to The Iran Project, although some experts do not believe that car manufacturers suffer from losses, according to many others, the accumulated loss of car manufacturers has reached 160 thousand billion tomans. And 3,000 billion tomans are added to this loss every month. The reason behind this issue is weakness in government management, sanctions-related problems, command pricing, etc. Experts described the command pricing of the car as the main cause of this loss.

Accordingly, when the government withdraws from the automobile industry then parts manufacturers, the private sector of the automobile industry, and of course foreign companies can compete with each other in a free space, and this is where the goal of the Ministry of Industry for breaking the monopoly and creating competition will be realized.

Translator : Fatemeh Khoshroo