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Opening Up Guarded to Foreign Companies |
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The
Industrial Development and Renovation Organization (IDRO) is considering
tenders from foreign auto manufacturers – hoping that their cooperation will
boost the scale of mass production.
This intention was announced by Reza Veyseh,
Managing Director of IDRO, at a time when companies such as Fiat,
Daimler-Chrysler and Peugeot Citron have expressed eagerness to invest in
Iran and have submitted tenders to that effect.
Veyseh believes that only an auto
manufacturer capable of mass production in the millions has a chance for
competition and survival; thus, IDRO is looking for a trusted auto
manufacturer to select as Iran Khodro and Saipa’s prime foreign partner. He
also told of ongoing negotiations with auto manufacturers such as Fiat,
General Motors, Renault, Nissan, Hyundai and Kia, and of Peugeot Citron CEO’s
regular visits to
Iran.
Veyseh stated that a
team of experts is responsible for analyzing the tenders and the results would
be presented to both sides during the next two months, after which the best
tender would be selected.
When asked about the
probable bankruptcy of numerous parts manufacturers if these new policies were
implemented, he declared: “we can no longer continue to produce expensive and
shoddy cars. We require investments of $1.5 billion in auto manufacturing and
$2 billion in parts manufacturing to become a station for design and
production of cars for the global market.” He added: “fear of bankruptcy is
due to lack of competitiveness; thus parts manufacturers must utilize all
their resources to satisfy the needs of auto manufacturers. To ensure their
own survival, parts manufacturers must follow auto manufacturers’ exercise of
using trusted brand names to present their products to the world market.”
Veyseh stated: “it is the brand name that
determines the price of the car. This can be seen from the successful
co-production of Volks Wagon in
Brazil and Renault in
Romania. We too can cooperate with reliable auto manufacturers to
achieve successful co-production.” He believes that the selection of a joint
managerial committee for Saipa’s Sazeh Gostar and Sapco is a significant step
towards achieving a common platform and the desired scale of mass production.
He said: “Iran’s domestic market has a yearly demand for some 750,000 cars
and the production of 700,000 cars next year, and the resulting competition,
would create a revolution in the price of domestic cars.”
Announcing IDRO’s 72% annual increase in car
production, Veyseh said: “this year the production of road construction
automobiles has witnessed a rise of 42%, parts and equipment 120% and export
of products by the affiliated companies 47%. This is while the country’s
overall economic growth was at 5% and overall industrial growth at 10% last
year.”
Veyseh said his organization plans to
implement 19 projects with an investment of 19.3 billion rials, adding that 13
of these projects have been endorsed. He said IDRO has another 114 projects
under study. Veyseh cited the completion of 78 industrial projects, the
operation of Phase One refinery of the South Pars project and the winning of
numerous auctions as some of IDRO's accomplishments in the current year. “The
structural construction of South Pars Phase One is 97% completed and will be
on stream in two months.” He added: “IDRO’s policy for future investment has
been drafted in the form of a five-year plan aiming to expand new industries
and specialized companies. These new industries are divided into high-tech
industries and strategic industries, and will be developed with participation
of the private sector and/or delegated to them immediately after completion.” |
