Deputy Minister of Industries for Metals Affairs Mohammad Ali Seyed-Abrishami said that the total domestic automobile production has topped 360,000 units in the current Iranian year (started March 20), posting a 25 percent increase compared to the previous year.
Speaking at a seminar entitled ‘Long term prospects for vehicle industry’, he added that if sufficient attention is paid to research and software applications in the industry, automobile production can be expanded to 500,000 units annually in the next two years.
Seyed-Abrishami also said that more capital should be invested in the sector.
Head of the Industrial Development and Renovation Organization (IDRO) Akbar Torkan, said the plan is to produce about 370,000 light and heavy vehicles this year of which 350,000 have to be produced by the two largest manufacturing companies of Iran-Khodro and Saipa.
It is projected that at the minimum 90 percent of the figure (320,000 units) will be manufactured, he stated.
He went on to say the meager rise in national income in recent years has contributed to the relatively low demand for automobiles, adding, “There is long way to go before we are able to manufacture 500,000 units of automobiles annually.”
Torkan added production of 500,000 automobile units annually will create new domestic markets as well as pave the way for exports. He also stressed that it is easier to exports parts than export automobiles.
Currently, 78 percent of value-added of automobiles is generated by the parts manufacturers and the remainder (22 percent) by vehicle companies, he noted adding, “Hence, there should be higher investments in the former.”
He also called for removing obstacles in the way of investments in parts manufacturing and said, “Slapping 57 percent taxes rates on industrialists hinders investment in the sector.”