Chronic automotive mortality and accident rates in Iran could be reduced if the country had more access to better quality parts says a leading European Chamber of Commerce.
Reports put the country’s death and accident rate at 38,000 per year year, with around 20,000 of these believed to be fatal, for a population of 79m, while a tough, albeit thawing sanctions regime, makes component replacement often problematic.
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Suppliers have been eyeing Iran for some time with its potential to be around a 1.6m market and as a temporary easing of sanctions to the automotive sector has provided some relief for overseas OEMs and component producers.
The French automotive suppliers association, FIEV, led a delegation of its members to Tehran early this year, while its Scandinavian counterpart, FKG, is looking to undertake something similar in 2015.
“Accidents every year in Iran – there are more than 38,000 killed [and wounded], Scandinavian-Iranian Chamber of Commerce (SIC) president, Reza Khelili-Dylami, told just-auto from Stockholm. “It is a very big accident and death [toll].
“I hope [we] can open some doors to European companies because already there are so many Chinese companies. We want better quality and higher quality to go to Iran.
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By GlobalData“Every year, Iran needs 1.2m cars, but [only] 300,000-400,000 [are] in production in Iran.”
Suppliers will be closely following the current negotiations aimed at finding a solution to the vexed question of how to contain any Iranian development of its nuclear programme, with a date of 24 November widely mentioned as to when any future sanctions decision could be taken.
Automotive has been specifically allowed to enjoy some respite from some of the harsher sanctions, although access to credit remains challenging.
The SIC recently presented a seminar at FKG’s Annual Forum in Gothenburg, bringing together more than 400 suppliers, OEMs, government officials and union leaders, titled: “Iran – Old New Market,”in which it listed the huge opportunities for Western component makers in a country hungry for quality imports.
The body – based in Stockholm – said Tehran wanted to move from a reliance on Chinese platforms as a way to assuage the effects of sanctions and Swedish manufacturers could enter that business space – potentially cooperating with domestic suppliers using joint ventures for components.
Precise numbers are not yet known as to the composition of next year’s FKG automotive visit to Iran, although the SIC president noted: “They can be five, ten, 20, 30 [it is], no matter for us.”
Estimates before 2012 put the trade balance between Sweden and Iran at SEK6bn (US$810mm) – SEK7bn but this has now plummeted to a tiny SEK700m.
“We must find some solution between the US and Iran, ” said Khelili-Dylami. “We don’t have another way. Iran needs so much things.
“Iran is a good market. Iran as export market to other countries in the Middle East – Azerbaijan, Uzbekistan, Tajikistan, Afghanistan [for example].”
Iran currently has a low car penetration of just 175 vehicles per 1,000 population putting the country 67th in world rankings.
