January 10-2014
Despite upbeat comments from carmakers, official statistics show Iran’s auto production is continuing to fall at a dramatic rate.
Sanctions hit Iranian automakers drastically in 2012, halting imports of the many components that cannot be made in Iran. The industry should have adjusted to that in 2012. But it is still on the decline.
Official figures show Iranian carmakers produced around 72,000 cars in the Iranian month of Azar, which ended December 21. That was lower than the output in the same month last year.
The Iranian auto industry is central to whole industrial base in Iran. It buys huge volumes of steel and glass and aluminum and keeps hundreds of sub-contractors going. Or at least it used to do so.
According to Deputy Industry Minister Mohsen Saleh-nia, national car production has totaled 520,000 in the first nine months of the current Persian year. That is a 24.5 percent decline from the same period last year.
If that rate of production continues, Iranian output this Persian year will total 693,000 units, down from 989,110 cars in 2012-13, which made the country Asia’s eighth largest car manufacturer.
The country was Asia’s fifth largest car manufacturer in 2011-12, with total output of 1,648,505. So production now is down 58 percent from the year before sanctions were imposed.
Sanctions are not the only problem. The collapse of the rial has meant that the prices of raw materials and imported parts have doubled, while the government under President Ahmadi-nejad held down price increases needed to cover costs.
Of course, the collapse of the rial made exported cars much cheaper and should have boosted exports dramatically. But that hasn’t happened, as Iranian cars appear to be suffering from foreign displeasure at the quality of Iranian automobiles.
The industry has been boasting about its plans for exports, but the latest official statistics show exports are actually plummeting. In fact, Iran is importing almost 10 times as many cars as it is exporting.
Iran exported 4,824 sedans during the first nine months of the current Persian year, an astounding 89 percent drop compared to the same period last year. Exports haven’t even reached 1 percent of production this year.
The value of the exported cars was a mere $33 million, according to the Iranian Customs Administration’s monthly report released December 28. The average car price was $6,794, which represents a 16 percent increase this year.
Iran exported 2,542 sedan cars to Iraq, 1,147 to Azerbaijan and 612 to Egypt during the period, with the remaining 523 scattered across Asia. More than half the exports are thus going to next-door Iraq.
But Iran imported 44,647 sedan cars, worth $924 million during those nine months, which indicates an increase of 49 percent in terms of volume and 31 percent in terms of value compared to the first nine months of the previous Persian year. Clearly, sanctions have not impaled the upper class that buys imported cars.
The average price of imported cars was $20,704, a 12 percent decrease compared to the previous year.