The total production cost of parts in Iran's automotive industry has significantly increased due to pressures from energy imbalance, currency fluctuations, and accumulation of financial claims. According to Mohammad Ali Zakeri, a board member of the Association of Homogeneous Powertrain Industries and Auto Parts Manufacturers, production costs have increased by 60 to 70 percent in the last 6 to 7 months compared to the end of last year.
Structural and Managerial Challenges in the Auto Parts Industry
Zakeri emphasized that the business environment in the auto parts industry has been severely damaged due to ongoing uncertainty and insecurity. The largest automaker in the country, which previously had a relatively better situation, has noticeably reduced its production, leading to a decrease in the final output of products. He added that this situation is due to the failure to settle debts and overdue claims of parts manufacturers from the state-owned automaker.
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This industry official, referring to the negative impacts of government economic policies, said: "Granting licenses to free zones and facilitating car imports has harmed production and complicated the situation." He also pointed to the energy supply crisis, stating that gas shortages and power outages in the summer have severely reduced production line capacities.
Consequences of Rising Costs and Impact on Production
Zakeri also discussed the shocks caused by inflation and currency market fluctuations, stating: "The surge in exchange rates and regional tensions have imposed operational costs and created a high inflation rate. The cost of electricity production has also significantly increased, affecting the final prices of parts."
He criticized the unbalanced structure and excessive growth of car assemblers, pointing to the increase in car prices in the market, stating that these prices have reached astronomical figures. He also noted the discrepancy between official statistics and the current reality in industrial parks, emphasizing that these problems have arisen due to disorder and lack of coordination in the industry structure.
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