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New Privatization Campaign
Technology, privatization, management, research, overseas investment, and exports are IRDO’s fields of interest.

Reza Veyseh, a former managing director of SAPCO and deputy managing director of Iran Khodro, was recently appointed head of the Industrial Development and Renovation Organization (IDRO). Since car production is a major business under IDRO’s umbrella, Veyseh is expected to announce his future strategies regarding some very controversial topics such as quality and price of Iranian cars.
Given a recent measure under consideration by Parliament members for a drastic cut in the prices of homemade cars and a green light to auto imports, Veyseh doesn’t have much time. Shortly after taking office, he outlined some strategies in a press conference. To reflect the status of automotive industry, we feature excerpts of Veyseh’s statements followed by views of some leading auto manufacturers:

Future Plans: Iran will annually manufacture up to one million cars within five years. The Ministry of Industries & Mines is drafting a plan, which places much emphasis on expansion of local production, improvement of qualitative and quantitative standards and local designing. The Ministry also seeks to strike a balance between supply and demand by pushing up production into one-million-car-a-year territory in the near future. Although yearly demand dwarfs supply by 250,000 cars, the Ministry is not about to turn to imports to make up for that deficit.

Changes in Composition: Introduction of a support-for-creative-industries policy has seen structural reforms at IDRO, leading to elimination of the Auto Department. Industrial projects already in planning and investment phases are now taken care of by the Industrial Investment Department. When production is in progress the Production and Utilization Department will take over the supervision. Eventually, the Economic and Financial Department will look into financial aspects of the projects.
The newly founded department in charge of industrial projects will supervise expansion of oil, cement and conversion industries. The new division will also lend a helping hand to local contractors to play a more active role in industrial projects at home.

New Strategies: An expert committee appointed by the Ministry of Industries has set new strategies for IDRO. The new strategies put the following high on IDRO agenda:

A Whole New Entity: IDRO will no longer be an economic firm; rather it will focus on managerial development. IDRO’s share in development projects will be no more than 49%. The private sector will be in charge of management and will be charged interest at 10% for 3-year loans.
IDRO has so far branded 50 companies “qualified” to be acquired by the private sector. The Privatization Organization will decide on a timetable for their handover to the private sector.