Page 50 - IRANRptNov18

Washington .
In a press release, signed off by the subsidiary’s purchasing head for Iran, John Verghese, Renault Pars admitted that the sanctions applied to automotive production in the country added “complexity” to its overall performance in recent months.
“Unfortunately, several international part manufacturers and CKD [complete knock-down assembly kit] suppliers have officially declared their inability to continue to supply automotive parts and raw materials, which has resulted in a disruption of the supply chain,” he stated.
Verghese said Renault Pars’ supply chain has “been confronted with considerable challenges due to the aforementioned situation,” adding: “The company has to inform you of its inability to continue ordering for your company for mass production from early November.”
The French official went on to say that Renault intended to continue operations in the spare parts segment in Iran, while calling for industry meetings to tackle the difficulties.
Despite not having any footprint in the US, Renault hoped it would manoeuvre through the sanctions period unlike other fellow French brands—largely PSA Group’s Peugeot and Citroen—which announced they were withdrawing from the Iranian market in the face of the sanctions.
Renault Pars has previously told buyers of pre-sold cars it would honour orders. However, this latest acknowledgement indicates the case may be otherwise in coming months.
Chinese automakers, which have been looking to use Iran as a springboard to other western Asian markets including South Caucasus and Persian Gulf countries, have shown some signs of scaling back operations in Iran.
In September, China’s biggest automaker on the Iranian market, Chery, which operates under the Modiran Vehicle Manufacturing (MVM) brand, quietly began cutting its overall staff numbers, while its local representative wrestled with multimillion-dollar debts owed to the Chinese parent firm.
The company has seen its sales fall threefold in recent months, according to various local reports. Vehicles like the Chery Arrizo 5, which is produced in Iran, have seen price rises of around 60% amid the currency turmoil caused by the sanctions, according to local price websites.
Reports circulating on social media o utlined how a local company representing a Chinese firm which sells 4x4 Haval-branded vehicles had its showroom trashed by angry customers after taking 100%-deposits for cars that never arrived in the country.
Mohammad Reza Soroush was named managing director of second biggest Iranian automaker SAIPA in a late-night change of company leadership, Islamic Republic News Agency has reported.
SAIPA has changed its boss three times in the past couple of years. There has been a series of gaffes by its management over car pricing, while mounting debts of more than $600mn owed to parts suppliers—according to some estimates of industry observers—are a weighty burden for SAIPA.
Senior car industry officia l Arash Mohebinejad, representing a group of auto parts producers, lately claimed that overall debts owed by the two biggest carmakers in Iran—thus SAIPA and Iran Khodro (IKCO)—roughly amount to Iranian rial (IRR) 200tn ($1.43bn at the unofficial rate).
SAIPA and IKCO have recently several times raised their car prices amid the collapse of the Iranian rial triggered by the reimposition of US sanctions on Tehran. Specific sanctions aimed by Washington at the Iranian auto industry
50 IRAN Country Report November 2018 www.intellinews.com