Defining Evolution: With a planning devised some seven years ago, Iran Khodro evolved from a nearly bankrupt company into the country’s leading company. It has the highest level of sales among all companies not in terms of vehicles; but in all terms it ranks first. Iran Khodro Industrial Group is a large family. Only in production operations, this group operates with over 400,000 personnel involved either directly or indirectly. Meanwhile, our today’s production is in fact half of what the company is targeting for 2003. By then, our production will grow two folds. Iran Khodro has assumed itself an annual growth of 25% for the next three years. Our total sales this year, including heavy and light vehicles, will tap 10,000 billion rials.

The Main Asset, the Main Task: The main asset of Iran Khodro is human resources. High volume of sales, and high production capacity are lower priorities for the company’s top management. What matters most is our manpower asset and we claim that even in workforce capabilities, Iran Khodro ranks first.
Many companies would rather place value on establishments and production lines, but Iran Khodro puts the greatest value on human resources. Our human resources are origins of intelligence and sources of change and development. Therefore, the main task that Iran Khodro assumes for itself is training and developing human resources for the future. This is the basis of all our operations. Real growth takes place when I can train a managing director better than myself, and every Iran Khodro executive could train a better executive than himself.

Six Major Phases: Advanced auto manufacturers of the world assume six phases for automobile manufacturing, which they have all been through. The first phase is assembling, in which automotive parts come into the plant to be painted and assembled. The second phase is establishment of production plants in which automotive parts are copied and reproduced. The third phase is bulk production. In the bulk production phase, the quality is not remarkable.
The fourth phase is establishment of designing bases which could be able to help in designing of both auto parts and bodies. It is from the fourth phase onwards that auto manufacturers truly emerge. This needs investment and the most important investment which auto manufacturers must make in this regard is investing in human resources. The fifth phase is designing of new products and establishment of export bases. The sixth phase, where automobile manufacturing finds its true meaning, is designing and building production lines. It marks the completion and localization of automobile manufacturing.

Honesty in Growth: In Iran Khodro, based on a collective agreement, we had to progress in all these six phases simultaneously. We had a deadline to achieve bulk production figures. It is therefore very natural that the quality should be less than perfect. That is been experienced in other countries. Maybe thirty years ago the market was not very demanding for Japanese products. Korean products were not very popular fifteen years ago just as Chinese products are not in great demand now. Despite the fact that our product qualities are yet to become perfect, the advantages that we have been enjoying at Iran Khodro were market demands and public support. In terms of customer satisfaction, Iran Khodro still feels indebted to citizens who supported the company with their financial resources, so that the company could direct a vast volume of funds toward establishment of designing bases and expansion of automotive parts manufacturers.

Investing Wisely: As an important measure, Iran Khodro has invested in establishment of centers that could design production lines. We have established a unique design and engineering division called TAM, an acronym for (Equipment, Tools and Machinery). About 400 dynamic engineers are working there. There were many industrialists who suffered budget deficiencies, there were many investors who lacked industrial vision and there were many workshops possessing both financial resources and know-how that lacked efficient management. We had to harmonize and activate all of them, equipping them with what they lacked. If we don’t have an element which we can’t independently have, we won’t hesitate to buy it. We don’t aim to re-invent alphabets here. Iran Khodro benefits from expert advice of many advisors in and out of the county. Our designing centers are unique in the Middle East in terms of software, hardware, and human resources. We don’t deny our many weaknesses. But we are determined to eliminate our problems. We constantly check to see who is ahead of us, how is he ahead of us and how can we get ahead of them.

Industry of Industries: Auto industry has been properly labeled as the ‘industry of industries’. It consists of a wide range of industries: Metallurgy, electronics, plastics, glassware, etc. Almost all industrial achievements man has ever made are applied in the automobile industry. Establishment and growth of auto industry in a country in fact marks the industrialization of a country. This important point puts a crucial challenge before us. Manifestation of Iran’s industrialization lies in our achievements in design, developing and producing in auto industry.

Rewarding Courage and Self-Confidence: The current progress of Iranian auto industry originates from an initiative taken by Pars Khodro Co. in 1984. This development was slowed down in various stages, but continued in Saipa and then came to Iran Khodro. The greatest reward of this movement was ‘self-confidence’ for Iranian auto manufacturers. We achieved the self-confidence to say “no” to a foreign company that imposed on us excessive demands. The thought that drives the Iranian auto industry forward is based on collective decisions, strategic plans and teamwork rather than imperative measures and orders. It is a completely national movement, aiming to promote national industry.

A Cultural Issue: Since our country is import-oriented and has made a habit of importation, some citizens have not yet accustomed to using Iranian products and supporting local industries. The main problem that our industry is facing is of a cultural nature which originated several years ago when oil entered the country’s economic scene. As a result, we gradually became victims of a cultural onslaught. When foreign-made goods were imported, the young generation lost their self-confidence because they thought they could not produce the same goods. This served as the origin of a cultural onslaught. We should treat industry industrially and with an industrial culture. This is extremely important.

Almost all industrial achievements man has ever made are applied in the automobile industry. It has therefore been labeled as the ‘industry of industries’.
Another day toward prosperity: Iran Khodro production line keeps busy to meet the demands and live up to the expectations

Auto Imports: During 1990 to 1993 something around $2 billion were spent on the importation of cars. But did it improve our prices or quality? The issue of prices is an economic one and is not so much related to the company itself. The issue of exports is a national issue. We should consider these within the framework of our national economy. The easiest thing to do with our revenues was to start imports. Some said we should import cars, and after a while when certain problems arose, they said we can import tropical fruits and cosmetics! No one said we should invest in such and such industry or sector and wait until it bears fruit in a few years time.

Born This Year: We have the potential and a highly-skilled work force. We should improve our industry at the hands of our very efficient work force who are instrumental to our progress. With the extensive moves taken in the auto-industry, a large budget was allocated to the training and education of our young generation. Our auto-industry will only come to life this year. Our two objectives of establishing a production organization and becoming an auto manufacturer have been achieved, and will continue to be enhanced alongside each other to remove any weaknesses.

Going Global: What is important for industry to become globalized is having a collective thought. The achievements I mentioned are not the work of one single person but the outcome of a teamwork. Every section and department needs expertise toward globalization. Iran Khodro is globalizing its administration and organization. A global organization is one which is dynamic and undergoes changes constantly.