Page 74 - IRANRptJul22

Big Russian automaker ‘has approached Iranian companies in search for critical vehicle components’
Iran’s president gives country’s automakers dressing-down after unannounced tour of IKCO
A big Russian automaker has approached Iranian parts manufacturers to access supplies of critical vehicle components, Iran’s official news agency IRNA reported on May 2, referring to an approach known to the Iranian Auto Parts Manufacturers Association (IAPMA).
Sanctions imposed on Russia as a result of its invasion of Ukraine have severely disrupted car production in Russia, the eighth-largest automotive market in the world, the news service said, adding that the Russian carmaker, which it did not identify, had sounded out Iranian parts manufacturers on a wide range of potential supplies.
Master cylinder brake boosters, hydraulic anti-lock braking systems, ABS sensors, seat belts, airbags, alternators, air conditioners, oxygen sensors, thermostats and window lift systems were reportedly among parts demanded by the Russian automaker, an IAPMA representative was quoted as saying. Iran has exported automotive components including engine cooling systems, suspension products and casting parts to the Russian market in recent years, IRNA said.
Russian automakers are scrambling to find alternative parts to products they now cannot obtain from various countries that are taking part in the sanctions campaign against Russia triggered by the war. In terms of Ukraine itself, Russian automakers are now unable to source Ukrainian wire harnesses, used in vehicles for electrical power and communication between parts, the news agency also reported.
Iran, like neighbour Turkey, has not imposed any war sanctions on Russia. Prior to the sanctions wave directed at Russia, Iran was the most sanctioned country in the world. Its automotive sector has struggled to overcome sanctions impacts over several years, sourcing components on the grey market from abroad and building up domestic knowhow in parts production. Former industry, mining and trade minister Alireza Razm Hosseini said last July that the total annual value of imported contents used in Iranian car manufacturing had been cut by $2.5bn. "Thanks to the efforts of automakers and component makers, the $4 billion dependence of the automotive industry on foreign companies has been reduced to $1.5 billion today, and the depth of internalisation has increased," he said.
"The achievement is due to the blessings of sanctions, and with the cooperation of auto parts manufacturers and the support of car manufacturers, we have succeeded in localising a large part of car components," secretary of the Iranian Auto Parts Manufacturers Association (IAPMA) Arash Mohebinejad said, speaking around the same time as the ex-minister.
Iran’s auto industry accounts for around 10% of Iranian gross domestic product and 4% of employment in Iran, IRNA said.
After paying an unannounced visit to Iran’s largest automaker Iran Khodro Corporation (IKCO) just outside of Tehran, Iranian President Ebrahim Raisi issued a series of executive orders to the domestic auto industry including an instruction that production should be pushed up by 50% in the new Persian year (starting March 21), local media reported on March 3.
The sudden appearance of Raisi was reportedly prompted by widespread public complaints about the poor quality of Iranian-made cars and an expression of dissatisfaction from Supreme Leader Ayatollah Ali Khamenei in this regard. During a tour of an IKCO depot, Raisi, according to IRNA, described as “unacceptable” the large number of incomplete cars waiting for components, the supply of which has been hampered by the company’s hefty outstanding debts.
74 IRAN Country Report July 2022 www.intellinews.com