No. 175, Taleghani Ave., Tehran 15814, Iran Tel: +98 21 88 38 13 55

Transcription

SPRING 2013 / ISSUE NO
NO.66
License Holder: Iran Chamber of Commerce, Industries,
L
Mines and Agriculture
Representative: Dr. Mohammad Nahavandian
Legal R
Editor in Chief: Iman Farjamnia
E
in Chief &
Deputy Editor
Ed
Executive Director: Elham Alaghebandan
Exec
Public Relations &
Pub
Advertising Director: Reza Mahdlou
Advert
Art Director: Behrouz Khoshkar
Contributors: Atefeh Rezvania, Siavash Rezaei, Afrashteh
Khademnia, Nasim Niazi, Bahar Kasra, Alireza
Behdad, Reza Arman, Saber Moghadami,
Mohammad Azimnezhad, Behrang Jalili, Fahimeh
Payam Asgari, Sama Farkhondeh Nejad
Translators: Zahra Salimi, Abolfazl Jafarnezhad
Photography: Bahareh Taghiabadi, Reza Mahdlou
Production Coordinator: Mohammad Sharifi
Productio
No. 175, Taleghani Ave., Tehran 15814, Iran
Tel: +98 21 88 38 13 55 - 6
Fax: +98 21 88 82 51 11
www.iccima.ir
editorialiccima@gmail.com
IRAN CHAMBER OF COMMERCE, INDUSTRIES, MINES & AGRICULTURE - QUARTERLY MAGAZINE
1
CONTENTS
3
Tehran: From a Vast Garden to a Big Parking Lot 4
Peugeot in Iran: Before and After 7
Foreign Automakers and the Iranian Vehicle Industry 11
World Economic Climate improves Slightly 14
The Iranian Automotive Industry Comes of Age
What is the Role of the Private Sector in ensuring Economic Growth?
22 Foreign Car Brands in the Iran Market
15
18
Off-Roading like a Gentleman: 10 Luxury SUVs on Their Way
24
28
The Auto Industry under Trasformation 33
Automobile Technology & Innovation 34
Auto Industry Outlook and Review
The Correlation between Happiness and Automobiles
36
39
Different Types of Car Engines 44
The History of BMW in Iran
The Market Share of Domestic and Foreign Auto Firms in Iran
The Growing Presence of Asian Vehicle Manufacturers in Iran
Cars of the Future
48
50
54
58
62
Modern Global Automobile Industry
Tehran’s Most Luxurious Cars
Production of Economy Cars a Way Toward Growth
65
70
Iran’s Auto Parts Industry; The Strategic Industry 73
The specifications of Iranian car engines 78
A Strategy for becoming more Competitive
Participation of Iran Chamber of Commerce, Industries, Mines and Agriculture in Qinghai International Halal Fair
Digital advertising tops agenda of responsible marketing experts meeting
Tabriz: One of Iran’s most Attractive Cities
News
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84
89
SPRING 2013 / ISSUE NO.6
83
81
EDITORIAL
The Iranian Automotive
Industry Comes of Age
n 1975, the assembly of a Chevrolet Iran (Opel
Rekord) at the Iranian car company Pars Khodro
took, on average, 45 man hours to assemble
against 25 man hours for the same car in an
Opel plant in what was then, West Germany. During
that same period, wage increases in Iran during certain
periods increased on average, three times more than
the annual rate of productivity, with production costs
at times rising so quickly that the prospect of creating
an export oriented industry such as automobiles
seemed dim. In the case of Pars Khodro and Opel, the
comparative difference in labor costs was 5.2.
Today, it is a different story. Today, Pars Khodro, which
has a joint venture with Renault, has been successful in
assembling and exporting Renault vehicles across the
region, even marketing an indigenized and co-branded
Renault vehicle (the SR) in regional markets. Renault
has repeatedly expressed its interest in developing its
joint venture in Iran as an export hub. Marked gains
in productivity, skilled labor and effective supply chain
management have made most Iranian manufacturers
competitive both locally and regionally and the growing
pains of the 1970’s are now past history.
One company, SAIPA, with a productivity level that is,
on average, thirty three percent higher than any other
company in Iran, has production costs that are now so
competitive that not only is the company successfully
exporting its cars to numerous markets, experiencing
a growth rate in exports of 256% in 2009-2010 alone,
but has also been able to enjoy a higher than industry
average profit margin of 8% on many of its top selling
vehicles, translating to its continuous performance as
one of the best performing companies on the Tehran
Stock Exchange.
Companies such as SAIPA and Iran Khodro, which
have been ranked among the top twenty companies
worldwide, are effectively exporting more nearly 15% of
their annual production across the world to continents
as far reaching as Latin America and Africa. In some
regional countries, such as Iraq, both companies are
market leaders, dominating their respective market
segments, and continue to achieve double digit growth
rates for exports. These successes are complemented
I
by the establishment of licensing arrangements and
production plants in over fourteen countries across the
world.
What makes such success all the more of interest
is the fact that the majority of exported vehicles are
local, indigenous designs sold under the brand names
of their manufacturers, with names such as Saipa and
Iran Khodro even becoming increasingly recognized
as household consumer brands in some neighboring
countries.
The key contributing factors to this success are
subject to a separate article. What bears mention
is that such success has been achieved under
circumstances that for many other companies would
seem to be insurmountable odds, ranging from the
effects of international sanctions to the implementation
of inconsistent government policy making and local
inflation anchors in monetary policy resulting in limited
access to domestic credit and cash flow.
2012 marked the fiftieth anniversary of the
establishment of the automobile industry in Iran. During
this period, despite all the impediments that they faced,
Iran’s leading manufacturers have made the transition
from imported knock down assembly operations,
with little added value, to the ability to design and
manufacture vehicles and capitalize upon a broad
and competitive local supply chain network. Given the
growing strength and competiveness of the Iranian
automotive industry, and the new economic climate
arising from the election of the Rowhani administration,
the time would seem ripe for international OEM’s to use
this opportunity to enter into strategic alliances with
their Iranian counterparts to not only capitalize on the
competitive advantages offered by Iranian partners,
including, inter alia, economy of scale, state of the art
infrastructure, well developed regional export networks
and a skilled and competitive work force but to develop
such partnerships into regional production hubs which
would be able to facilitate low-cost and high volume
entry not only into the continuously growing Iranian
market, but to the fast growing regional markets
surrounding Iran as well.
3
REPORT
Tehran:
From a Vast Garden to a Big Parking Lot
utomobile was first imported to Iran during the
early 20th century. During his first trip to Europe,
Mozafar al-Din Shah, a Qajar king,
brought the first automobile to Iran
in the year1902, only 15 years after
the production of the diesel engine.
As the king was returning to Iran,
two automobiles, which he had ordered, were ready at his door. The
automobiles, manufactured by Re-
A
4
nault Company, were sent to Iran,
but only one of them reached Tehran.
The cars were imported to Iran in
situation that the government treasury was poor and the nation lived in
bad economic conditions. The king
borrowed a high amount of money
to buy the cars.
According to Kahkeshan magazine, the director general of the
company gave one of the men-
tioned cars to the king as a gift but
the latter cost 1600 Franks. The
director had told the king that next
cars to be sold to Iran would cost
1500 Franks each. The king said,
“we do not want any other cars.”
But the director answered, “we
have put 100 sedans apart to be
exported to Iran because we are
sure as the king arrive at Iran all
princes and politicians ask for a car
like yours.”
REPORT
The car gifted to the king was an
oil-filled vehicle bought from International France Car Exhibition in
1902 which valued 40 thousand rials. The blue vehicle was driven to
Iran by a French driver named mussio Varrone. After Mozaffar Al Din
Shah, his successor Mohammad
Ali Shah used the car until he was
assassinated.
One day, when Mohammad Ali
Shah royal carriage and his car
were passing in front of Saudi Arabia’s embassy near Baharestan
a bomb was thrown at them. As a
result of that assassination attempt
some of the riders, coachmen and
footmen were killed or injured. The
king who was in the car survived.
After Mohammad Ali Shah, the car
was given to his son, Ahmad Shah,
he bought second car and drove
them quite frequently.
During Reza Shah Pahlavi Iran
witnessed an era of modernization.
During that period automobile was
a luxury goods which was owned
only by statesmen, rich people, ambassadors and foreign envoys to
Iran and well-known businessmen.
His son, Mohammad Reza Pahlavi was a car freak and one of the
biggest car collectors of the world.
He had more than one thousand
cars from different world famous
brands, including Lamborghini
Countach, different models of Rolls
Royce, more than 20 models of
Mercedes-Benz, Alpha Romeo, Cadillac, Ford, BMW and Chrysler…
Iran Car Import Nostalgia
We reviewed first car import history to Iran above. After that Iran
gradually turned to one of biggest
car importers in the world. The first
person who familiarized foreign
auto makers with Iran market was
Seyyed Ahmad Mirsepassi. He was
the private driver of Hassan Vosough Al-Dowleh the Qajar prime
minister. Later, he became Ahmad
Shah driver and accompanied him
during his several trips to Europe.
Mirsepassi was a smart man who
cleverly got familiar with foreign
auto firms directors during Ahmad
Shah trips and was given some facilities from those companies. Then
he helped them enter Iran market
and this way he collected a huge
wealth and credit.
Later he was assigned as the advisor of the army in the field of arms
and machineries. He had helpful information about driving ability and
different kinds of cars. After a while
he started a self-employed job, he
also favored Qajar court as a credited and rich businessman.
First Series of Imported Cars
According to the book “Tehran
Social History in 13th Century” written by Jaafar Shahri, Ford Crook
cars were the first series of cars
imported to Iran whose top speed
stood at 40 km/h. the mentioned
cars did not have any gearboxes
to change the engine power so
they could only move on flat levels
and streets. They also were unable to move on downhill roads, for
the driver could not control the car
completely.
In later years cars with gearboxes
and trucks with differentials with different capacities were imported to
Iran. These cars name GrahamPaige had oil brakes and its wheels
were filled with wind stream. All of
them were crook and their lights
turned on with matches and carbon
dioxide. The cars did not have start
system and turned on with handles
located in front of the cars.
300 toman Cars
Then cars cost 300 to 350 tomans
and people could buy one with a
prepayment of 50 tomans. Lauri
cars price tag was 600 tomans of
which one fifth could be paid previously and the rest in installments.
Graham-Paige sedans were the
most expensive cars at that time
which valued two thousand and
five hundred tomans. The cars had
a lot of spare parts with it such as
two spare tires, a wrench set, a
mobile light, a pump and prizes like
watches, lighter, leather coat, cigarettes… were offered to customers.
Wearing leather coats, pilot sunglasses and hats the drivers looked
like pilots and showed off.
In the year 1929, more than 90
foreign automakers exported cars
to Iran of which Americans ranked
first. During the mentioned year
about seven thousand cars and
their spare parts were sold to Iranian rich people and businessmen.
At that time car sales reached two
million and five thousand dollars
annually.
Iran Market, an Odd Mix of
Brands
“Etelaat” Persian newspaper
published an article in 1929 during which the author criticized Iran
car market. According to the article
about 1522 city and family cars and
1105 trucks, buses and minibuses
were imported to the country. The
paper criticized that Iran auto market was an odd mix of brands and
cars and nowhere in the world had
such situation. The author warned
that it was the sign of spreading
people’s tendency toward fancy,
for it showed that every person had
bought six different brands of cars
during one year.
On the other hand foreign embassies in Tehran changed their cars
at the beginning of each Christian
year and replaced them with brand
new one to show them off and advertize for them. USA, UK, France,
Italy and Germany were the major
contestants to grasp the attention
rich Iranian people.
First Standard Trucks in Iran
The first trucks entered Iran from
western boundaries and were very
old and broken down, but because
they transited goods for Iranian
traders and received good amount
5
REPORT
of money they stayed in Iran. Those
trucks, highly welcomed by Iranians, had iron lights and filled tires
and no differentials.
A man called Fouladi who was
one of biggest then car dealers and
repairmen imported first standard
trucks, having gearbox, differential,
dynam disks and battery, and used
them in his garage. Later Fouladi
who had also monopolized transport of post consignments, won the
official dealership of Fiat Company
in Iran and began to import Fiat sedans with capacity of seven or eight
passengers. The sedan was like
Jeep Stations used as ambulances
in Western countries and was used
to move passengers in Tehran.
Then Fouladi sold them to Bank
Melli Iran (BMI) and the bank established first company for public
transportation and used them as
taxis. BMI also hired some drivers
to run so called ‘auto bank’ Fiat sedans and moved people from Toopkhaneh Square to their required
directions.
Trucks at that time were so expensive regarding their weight and
facilities so that people sold their
homes and properties to be able to
afford such truck. The people were
extremely eager to buy those trucks
because 1. Working by them was
incredibly profitable 2. Businessmen and traders welcomed those
trucks because their goods could
be transferred to other cities and
provinces faster and easier 3. The
job of truck drivers was one of high
class occupations 4. The truck’s
owner could blow his own horn
among his relations and neighbors.
In other words drivers became a
major rival for state employees and
traders among social classes.
No longer then Iran became a hub
of several models and brands of
trucks and mini trucks (kamyonets)
and a historical revolution occurred
in the country’s transportation system. After Fouladi Enterprise, many
people founded transport and travel
institutes of which the most famous
were Nosratollah Etehadieh Enterprise and Transport Institute lo-
6
cated in Sarcheshmeh Crossroad,
Tehran-India-Bain Alnahrain Parking in Shoosh St. and BT travel
institute whose ticket’s price was
more expensive than others’. The
company offered first entertainment
system for passengers and its drivers and staffs wore formal clothes.
First Enterprise in Iran
Kazerouni Transportation Institute and Trade Firm was one of the
first business companies founded
in Southern Iran. Cities like Boushehr, Bandar Abbas, Khorramshahr
and Bandar Anzali were among the
premier cities whose transportation
system and car business grew fast.
First Second Hand Goods Exhibition
During those times official dealerships sold only brand new cars
and second hand cars were sold in
parking lots and garages. The first
center to buy and sell second hand
cars started to work as a cargo ltd.
Some of those traders repaired
second hand cars and sold them to
people with higher prices, so that
then media warned people to avoid
buying such cars.
Reviewing the history of Iran car
market and auto imports shows
that Iran and especially its capital,
Tehran, became a parking of different brands of old and new cars.
Peugeot in Iran:
Before and After
uring beginning months
of last Iranian year
(ended March 20 2013)
a bad news shocked
Iran auto market and car traders.
As per the news, the new partner of Peugeot is considered as
an American giant and therefore
people talked about the strategic
union of General Motors (GM)
and Peugeot-Citroen Group and
cession of 7% of French Company to GM and also about break off
between Iran Khodro and its old-
D
est partner Peugeot.
The French companied have
been benefitted from multibillion Iran market and leaving this
source of revenue worried the
French managers of the company. On the other hand after years
of partnership the Iranian side
achieved the technical knowledge
and found several ways to leave
the international sanctions behind.
The Iranian experts could reproduce the sedans under the
Peugeot brand license and foil
West conspiracy to let up Iranian
production. However if any of
foreign brands leave Iran market
they will hurt themselves for this
market is a profitable one with
high demands and good customers. So if they leave such market
they will lose a lot and abandon a
significant profit.
If we look back, we can clearly
find out that during March 2012,
American GM pressed Peugeot
to haul auto part exports to Iran.
7
REPORT
At that time Iran production under
Peugeot brand was very high and
the French side harmed more that
Iranians; because it lost a high
profitable market for its products.
So that AFP announced Peugeot
blamed Iran sanctions for its sales
plunge and crisis in its factory in
North-Eastern France.
Meanwhile operations at a
Peugeot auto plant in northeastern France have been suspended
because of the lack of spare parts
from Iran.
Management from PSA Peugeot Citroen put 220 employees at
its Vesoul factory in partial redundancy due to a slowdown caused
by blocked shipments from Iran.
This latest decision will require
redeploying another 300 workers and the axing of 300 part-time
jobs.
At the same time there were
rumors about Renault withdrawal
from Iran, but French giant carmaker Renault announced it is
committed to continue its services
in Iran despite international sanctions imposed on the Islamic Republic.
At the same time media announced another Peugeot factory
was closed for the reason of sale
plunge and high losses made
through leaving Iran market and
financial problems of European
countries. The factory located
near Paris had three thousand
employees and was predicted to
be closed in early 2014. It is the
first time during past 20 years a
French auto maker announces
closure for such reasons. This
made French statesmen worried so that they declared their
more support for the factory and
expressed their dissatisfaction
about the bankruptcy of it.
When Peugeot affirmed its leaving from Iran, economic experts
warned that the company would
suffer the loss of the largest and
most profitable auto market of the
Middle East region and it would
also tarnish its profile in Iran.
8
What Peugeot Lost After Withdrawing Iran Market?
It is worth noting that Iran is the
second large market for Peugeot
products. More than 300,000
cars are produced and sold in
Iran under the brand of Peugeot
which accounts for 40% of Iranian
car market. Given that most of
the products supplied under this
brand in Iranian market are made
domestically or imported from other countries, Peugeot has lost an
easy source of income. Also the
halt in the export of spare parts to
Iran will expose workers involved
in producing them to lose their
jobs.
At present Peugeot 206, 405,
207i and Pars are being manufactured in Iran under the brand
of Peugeot which are highly welcomed by customers and demand
for them is high in Iranian market.
On the other hand, Peugeot withdrawal from Iran market made domestic auto part makers produce
Peugeot parts themselves by 100
percents.
When Peugeot abandoned Iran, its partner Iran
Khodro asserted that 80
percents of its production
were made domestically
during recent years and
Peugeot sanction against
Iran did not harm the company.
When Peugeot abandoned Iran,
its partner Iran Khodro asserted
that 80 percents of its production
were made domestically during
recent years and Peugeot sanction against Iran did not harm the
company.
As per the reports during first
quarter of 2008, of 132 thousand
cars Peugeot sold abroad, 667
hundred (more than 50 percent)
were sold in Iran. This is while
during the mentioned period only
32 thousand of Peugeot products
were sold in EU and 99 hundred
in large market of China.
A Historical Loss
What happened to the French
giant automaker after leaving Iran
profitable market? The French
auto giant Peugeot Citroen announced a net loss of five billion
euros (USD 6.7 billion) in 2012,
making it the worst result in its
history.
The carmaker released the
historic loss, blaming 4.74 billion
euro in asset write-downs and a
collapse in European sales for the
results.
The automaker is reportedly
losing seven million euros every
day. This is while the company
has reported a 588 million-euro
profit in 2011.
In an attempt to recover, the
company previously announced
that the it plans to eliminate
11,200 jobs. This has sparked
several demonstrations by the
workers. The company’s profit in
2011 totaled 588 million euros.
Yet revenue fell 5.2 percent to
55.4 billion euros compared to the
previous year.
Philipe Varin the chief executive
of Peugeot Citroen said that he
laid a foundation in 2012 to help
the company recover present critical situations.
10m Euros Loss Monthly
During a press conference,
Jean-Baptiste de Chatillon chief
financial officer of Peugeot Citroen mentioned that the company
would lose 10 million euros per
month due to cutting exports to
Iran. He further warned about a
critical plunge in operational profit
of the company.
As experts predicted, Peugeot Citroen company’s revenues
dropped by 7.3 percent during
first quarter of 1012. The giant
French automaker was forced to
cut its auto prices as a result of
EU car market breakdown which
caused further decrease in its in-
REPORT
comes.
According to reports Peugeot
sales plunged to 14.3 billion euros during first three months of
2012. General Motors announced
an alliance with the French automaker Peugeot Citroen in February which it said will save the
automakers a combined $2 billion
within five years. But a price decrease of 0.9 percent in Peugeot
brand new cars has cut the company’s sale rate during the current
year.
At the same time the company
pledged to cut its cash-consumption rate by one billion euros (50
percent) in 2013 and reach the
break-even level by 2014 after
burning through 3 billion euros
last year.
Hidden Causes of Peugeot
Withdrawal From Iran Market
Mohsen Razmkhah, a member
of Iran Auto Part Manufacturers
Association said that after the Islamic Revolution (1979) Iranians
have learnt to convert foreign
threats and sanctions into economic development and growth
opportunities.
He further noted that recent international sanctions against Iran
in stronger than before; however,
most of them are superficial and
are imposed only to press Iranian
nuclear negotiators.
Iran and Western powers have
been negotiating Iran’s nuclear
program for many years. The
West believes that Iran nuclear
program is not peaceful, but the
country’s officials deny it. Western powers press Iran government to halt its nuclear plan. To
do so they impose international
economic and political sanctions
against the country.
Razmkhah stated that Peugeot
would not stand abandoning Iran
market, for it would lose a high
source of profit and an attractive
market.
About two years ago Peugeot
officials declared French government that as a result of Peugeot
withdrawal from Iran auto industry, the company would be forced
to lay off more than five thousand
workers. So French government
let them keep on their function in
the strategic country of Iran.
“The cut in Peugeot auto parts
export to Iran is a political and
media show to press Iranian nuclear negotiators,” he said, adding that even if such threats and
limits are enforced, they will give
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Iranian experts and engineers a
new opportunity to optimize the
quality of Iranian products and
enhance technical knowledge to
manufacture domestically made
cars and auto parts.
He stressed that at present, Iranian auto part manufacturers are
easily able to reproduce a major
portion of imported auto parts.
Razmkhah went on to say, “Iranian experts can simply achieve
the technology to make highly developed parts like sensors and air
backs.”
However whether Peugeot
leaves Iran or not, he said, “we
should appreciate this opportunity, produce all imported auto parts
domestically and jump through a
significant change in quality and
technology of Iran-made cars.”
The member of Iran Auto
Parts Manufacturers Association
opined that Iraq imposed war
against Iran paved the ground
for both industrial and economic
growth of the country. He went on
to say that if the government supports domestic firms, departure
of foreign auto firms like Peugeot
Citroen will not only harm Iran
auto industry, but is also the best
chance to decrease Iran industrial
gap with other countries.
9
REPORT
Peugeot After Leaving Iran
Peugeot was one of the rare
western automakers to hold a
significant share of the Iranian
market. The company’s ties to the
Middle Eastern nation go back to
1978, when it purchased the remains of Chrysler’s shattered European operations.
Since that point, Iran has grown
to become a key market in Peugeot’s global strategy. In 2011, over
450,000 complete knock-down
(CKD) kits were delivered here,
a number which equates to about
21% of Peugeots sold globally.
In spite of these positive numbers, the automaker announced
that it stopped exporting CKD kits
to Iran in early March, and that it
doesn’t plan on exporting any in
April, either.
The auto giant said that global
sales plunged by 16.5 percent
in 2012 owing to contracting demand in debt-crippled southern
Europe and the suspension of its
activities in Iran.
Peugeot
Citroen
recorded
worldwide unit sales of two hundred and eighty two thousand
assembled vehicles, down 8.8
percent. Together, sales of assembled vehicles and CKD units
totaled 2,965,000, down 16.5 percent.
Southern
Europe,
where
Peugeot Citroen has a particularly large presence, was hit hardest
by economic crisis, with the market down 13.3 percent in France,
14.9 percent in Spain and 20.9
percent in Italy.
Peugeot’s decision to suspend
business in Iran was to comply with international sanctions
against the Islamic republic over
its nuclear program.
France also came under intense pressure from Washington
lobbies to shut down its thriving
operations in Iran after US auto
giant General Motors acquired
a 7.0-percent shareholding in
Peugeot Citroen.
According to a Press TV report,
Peugeot Citroen has posted a net
loss of 819 million euros (about
10
$989 million) in the first half of this
year.
Peugeot, Europe’s secondbiggest automaker, announced
that it would slash 8,000 domestic
jobs. The company is also set to
shut down a plant outside Paris;
the first such industrial closure for
France in more than 20 years.
Union representative of the
closed Peugeot plant Jean-Pierre
Mercier criticized the company for
lay-offs.
The decision by Peugeot,
France’s largest automaker,
to axe 8,000 jobs has caused
a political firestorm but they
are in large part caused by
France’s sanctions against
Iran. The cuts, which have
been deemed unacceptable
by The Government, have
also angered factory workers.
“Peugeot’s decision to stop
working with Iran is costing us
today, but it’s not right that our
workers paying the price for decisions made by the management,”
he said.
Peugeot says their woes will
last until 2015, as the company is
planning more wage and job cuts
as they look for 1.5 billion euros
in savings.
Beforehand, the American GM
announced an alliance with Korean Daewoo Company in 2003.
The Korean company used to
produce Cielo sedans jointly with
Iranian Kerman Motor Company.
The alliance forced Daewoo leave
Iran market and as a result Cielo
production which was highly welcomed by Iranian customers was
stopped.
Now we can conclude that
France and its giant automaker
harmed terribly from cutting off
their relations and cooperation
with Iran.
The decision by Peugeot,
France’s largest automaker, to
axe 8,000 jobs has caused a
political firestorm but they are in
large part caused by France’s
sanctions against Iran. The cuts,
which have been deemed unacceptable by French President
Francois Hollande, have also angered factory workers.
Porsche Hurt Too
Peugeot was not the only foreign auto firm whose withdrawal
from Iran market harmed it awfully. Porsche was the latest brand
decided to leave Iran. Iran contributes significantly to Porsche’s
overall earnings. In fact, sales
in its one dealership in Tehran
topped $17 million in first quarter
of 2012, so this is definitely a big
decision on Porsche’s part.
According to statistics conducted by Iran Customs Organization,
about 563 Porsche sedans valued
49.8 million dollars were imported
to Iran. Porsche officials have announced that the company would
withdraw from Iran market due to
International bans against Iran.
This is while Porsche official dealership in Tehran has denied the
news.
The figures and statistics show
that luxury and super cars’ stake
in Iran auto industry and market
is rather tiny, so that stopping the
import of such cars would not affect Iran car market and future.
Foreign Automakers and the
Iranian Vehicle Industry
11
ARTICLE
ran’s automotive industry is the second most
active industry of the country, after its oil and
gas industry, accounting for 10% of Iran’s
GDP.
During its approximately 50 year activity, many
foreign famous automakers tried their chance to develop it, but most of them left the country and only
put their names as memento.
General Motors (GM), Land Rover, Daewoo, Proton, Volex Wagon, Benz, Fiat, Citroen and Mitsubishi
were the nine big automakers that abandoned Iran
beneficial auto market for some marginal problems.
From them GM was the first and Mitsubishi the last.
Now we should take a look at these companies
and answer some questions: why and when these
nine automakers deserted the country? What were
those marginal problems that frustrated them?
I
General Motors
We first start with the famous American GM. The
company entered Iran in the region of auto manufacturing birth in the country; so that Pars Khodro as
the oldest automaker in Iran started its activity with
the help of GM.
The two auto firms’ first cars, the Aria and the Shahin, were based on AMC’s compact 1966 Rambler
American and were launched in 1967. Production
ended in 1974. In addition, they jointly built Buick,
Cadillac and Chevrolet (Nova). Some of these lovely
cars can be still seen on Tehran busy streets.
However despite its short cooperation with Iran
auto industry, GM effect on the country’s auto assembly and manufacturing industry was significant.
The American company did some investments on
Iran auto industry too in order that it founded its first
creditable laboratory in this country. It was while GM
ended its cooperation and investment in Iran and left
the country for ever.
Land Rover
British Land Rover was another early friend of Iran
auto industry which cooperated with a private company named Morattab Khodro Co.
At that time Land Rover produced the only SUV
models in Iran which had their special customers.
However, Land Rover abandoned Iran market forever and preferred to condone their profits rather than
staying and facing marginal challenges.
proval by the Government of Islamic Republic of Iran
to assemble Daewoo passenger cars at Bam city in
Kerman province.
In 1991 as the assembly plant was being established, simultaneously Kerman Khodro commenced
the imports of CBU vehicles of Espero and Racer
models from Daewoo Motor Co.
For the sales, delivery and after sales services an
independent organization was formed in 1992 and
incorporated as Modiran Pars Co.
In 1996 Kerman Khodro and Daewoo Motor Company jointly established Kerman Motor Company
which started its activities in the field of assembling
Cielo sedan and later on in 1999 Matiz model at
Bam assembly plant in Kerman province.
Unfortunately after 12 years of cooperation, Daewoo Company sold most of its assets to American
General Motors after running into financial trouble.
Then the company was forced by its American owner depart from Iran and leave the country with its
sanction challenges.
Proton
The tragedy did not end after Daewoo leave of Iran
and after several years Zagros Khodro lost its Malaysian partner, Proton, because of state companies’
interference.
Until two years ago, the two had close cooperation
and could produce Proton Vira and Gen-2 sedans
jointly in Iran. As the result of this cooperation Zagros Khodro was identified as a reliable automaker
from the private sector.
After inking a memorandum of understanding
with SAIPA Car Manufacturing Co., proton found
no promising future with Zagros Khodro and left its
counterpar. Then Proton started cooperating with
SAIPA which did not last a long time. Ultimately, the
company called off its activity in Iran and the name
of Zagros Khodro was removed from Iran auto industry.
In the meantime, SAIPA did not follow its MoU with
Proton and any cooperation was made between the
two.
Volkswagen
If you take a look at cars stuck in traffic jam, you
Daewoo
Iran private auto industry too had had close cooperation with renowned global automakers. In addition to Morratab Khodro which was mentioned
before, Kerman Khodro lost Daewoo as its popular
partner.
In the year 1990 Kerman Automotive Industries
Co. (KAIC) and Daewoo Corporation from South
Korea signed a contract for a joint venture under ap-
12
ARTICLE
can find out that some of them are marked with the
largest EU car manufacturer (Germany’s Volkswagen).
VW and Bam Khodro-another private car manufacturer-worked together and assemble Gol sedan
which found many customers within Iran’s that time
developing and profitable car market. Unfortunately
international limits and sanctions prevented the German company from prolonging its activity in Iran. At
last it went from Iran and Gol production was suspended too.
Fiat
Fiat was the only Italian car firm that began a short
cooperation and investment in Iran
During 2000s, the Italian firm signed an agreement
with Iranian TOPCO and started to produce Siena
sedan. Yet both TOPCO financial challenges and
international sanctions made Fiat leave the country
as the sixth popular international automaker. Now
Saipa wants to buy TOPCO shares and make up for
losses and bring the Italian firm again to the country.
Citroen
French Citroen Auto Firm was a very popular
brand in Iran whose cooperation with the country
lasted longer than others. The first car the Citroen
produced in Iran was the Citroën 2CV which was
called the Jian in the country. The cars were originally manufactured in Iran in a joint venture between
Citroen and that time Iran National (Pars Khodro) up
until the 1979 Revolution.
After the Islamic Revolution the French company
resisted political challenges and did not leave the
country. It signed a ten year contract with SAIPA to
assemble admired Xantia models in Iran and when
the contract time ended last year, it left the country
too.
Mercedes-Benz
Complex bureaucracy and international limits drew
out renowned Mercedes-Benz ties with Iranian auto
industry.
The manufacturer of luxury automobiles and sport
utilities had been active in Iran since before Revolution era. It continued its cooperation after the Revo-
lution and jointly produced luxury sedans with Iran
Khodro. Mercedes-Benz officials announce some
time ago that it is not profitable for them to keep on
their maneuver in Iran, so they ended their performance here.
Mitsubishi
Japanese Mitsubishi did not have an influential
presence at Iran automotive industry; however, it left
the country as the last foreign automaker. The company worked as a team with Morratab Khodro and
then Bahman Automotive Group and manufactured
popular SUV sedans like Pajero. Its officials claimed
that Iran market was not attractive for them.
Why They Left?
Now there is a question that why foreign automakers left Iran market? We interviewed some experienced auto experts and asked them about reasons
behind diminishing foreign investment on Iran auto
industry.
The Secretary of Iran’s Vehicle Manufacturers’ Association Davood Mirkhani Rashti said that political
setbacks and international sanctions were the most
important factors that made foreign firms leave Iran
auto market. He went on to say that beside political
strains, they could not adjust themselves with Iran
working environment. “For example the private sector in the country is not powerful enough to attract
foreign investment and boost production,” Mirkhani
added.
The official noted, “maybe if we were firmer we
could keep some of those foreign automakers in our
country.”
A member of Iran’s Automotive Part Makers Association said in this regard that Iran car market is
attractive enough for foreign investors but international limitations put them apart from the country’s
auto industry.
Mohammad Reza Najafi Manesh added that after
the Revolution conditions were not suitable for foreign investment on Iran auto industry until the Parliament ratified a bill to support foreign and domestic
automakers. He stressed foreign automakers’ significant effect on Iran auto market, stating that political pressures were the main element that forced
foreigners leave Iran.
Najafi Manesh went on to say that the private sector in Iran is not as powerful as the public (state)
sector this is why it breaks easily facing international
and political challenges. He noted that if production
capacity of domestic automakers was high and our
economy was stronger foreign automakers could
avoid international sanctions and continue their activities in Iran.
13
REPORT
World
Economic
Climate
improves
Slightly
T
he Ifo World Economic Climate Indicator continued to rise, even if only slightly.
Both assessments of the current economic situation and the six-month economic outlook improved marginally compared to
the previous quarter. There are a growing number
of signs that the world economy is stabilizing.
Conducted in co-operation with the International
Chamber of Commerce (ICC), the Ifo World Economic Survey (WES) assesses worldwide economic trends by polling transnational and national
organizations worldwide on current economic developments in their respective countries. Its results
offer a rapid, up-to-date assessment of the economic situation prevailing around the world. In April
2013, 1,178 economic experts in 125 countries
were polled.
While the economic climate indicator rose only
slightly in Western Europe and North America, it
increased sharply in Asia. Thanks to much brighter
assessments of the economic situation and expectations, the indicator for Asia reached its highest
mark since the end of 2010. In North America, assessments of the current economic situation are
somewhat better, but remain below the satisfactory
mark.
The experts surveyed remain positive about the
six-month economic outlook, but to a somewhat
lesser degree than last quarter. In Western Europe
the economic situation remains unfavourable. Economic expectations for the next six months, on the
14
other hand, are slightly more positive, leading to
a moderate overall improvement in the economic
climate. The results point to the fact that the world
economy seems to be falling into step. There might
be an increasing trend towards higher growth
rates, although business cycle dynamics remain
moderate. Monetary policy in advanced economies
remains strongly expansionary. Central banks in
the US and Japan have announced plans to leave
interest rates at their currently low level and to
continue to implement quantitative easing measures until the economy stages a clear recovery. In
Europe, restricted fiscal policy in many countries
is constraining any stronger upswing. In emerging
countries, business cycle dynamics look set to gain
momentum.
World average inflation estimates for 2013 fell
somewhat from 3.3% to 3.2%. WES experts on
average expect short-term interest rates to remain
largely unchanged over the next six months, while
long-term interest rates are expected to increase
slightly. On worldwide average, economic experts
expect moderate increase in the value of the US
dollar over the next six months.
ICC Secretary General Jean-Guy Carrier was
pleased with the survey results, but cautioned
against overconfidence. He stated: “The continued
trend of quarter over quarter economic growth is
cause for optimism, but governments and businesses must continue to sustain this positive momentum.”
REPORT
What is the Role of the Private
Sector in ensuring Economic
Growth?
W
hen most people say
or think that there is a
need to grow the economy, their first thought
is that government will fix it. For sure,
governments should create and encourage the creation of the environment that will ensure prosperity and
sustainable economic growth. They
do this, among other things, by establishing and protecting private
property rights; ensuring national
defense; fighting crime; providing a
sound educational system; maintaining a public health system; ensuring
a sound monetary system; collecting the necessary revenues; paying
the public debts; and sourcing funds,
when necessary, to pay debts and
to finance development. In addition,
government is a major employer as
well as a major purchaser of goods
and services. Taken all together,
these contribute to growing the economy. But, it is not the full story.
Economic growth is the rate of
change in real GDP between one period and an earlier comparable peri-
od. This change could either be positive or negative. When the change is
negative, one can also say that the
economy is shrinking or contracting.
The table following shows that
in 2009, real GDP for the Jamaican economy contracted by 2.8
per cent, following a contraction of
1.0 per cent in 2008. In the three
years before that, 2004 - 2007, the
economy grew an average of about
1.4 per cent, meanwhile agriculture,
forestry and fishing; electricity and
water supply; finance and insurance
services; and hotels and restaurants
combined to contribute about 1.0 per
cent to growth. This was overtaken
by contractions in the rest of the
goods producing industry in the services industry.
Overall, the goods producing industry contributed about 20 per cent
to GDP in 2009, while the service
industry accounted for 80 per cent.
There is no government/private sector breakdown in the composition of
the GDP available. However, government employees, at about 120,000
15
REPORT
comprise about 10 per cent of the
total workforce of about 1.2 million.
Government entities include the
Parliament, Cabinet, ministries and
executive and non-executive agencies. The private sector takes in the
vast informal, commercial sector,
small and medium economic enterprises, private companies, public
companies, not-for- profit companies, partnerships and sole traders.
Government spending contributed
about 30 per cent to GDP in 2009
and the remaining 70 per cent could
be attributed to the private sector, if
we assume that everything that is
not government falls within the private sector.
Government and the private sector
A basic difference between the
government and the private sector is
the profitability motive. Whether it’s
hiring people, establishing branches
or spending money generally, the
bottom-line justification in the private sector is increased profitability.
With government, the bottom-line
consideration is whether increased
spending will bring about increased
or better services for the population
16
and for the defense of the country.
The private sector strives to do more
with less while the government often
seeks to do more with more.
Doing more with less is at the heart
of an entrepreneurial spirit. When
people apply for employment at our
company, we are very keen to identify and to understand their attitude towards entrepreneurship. If they have
a proper entrepreneurial disposition
and we succeed in strengthening it
through their- on-the-job experiences with us, we believe we will have
multiplied that individual’s ability to
contribute to growing the economy,
whether that individual remains with
our company or not.
Job creation is one of the key drivers of economic growth as is private
consumption. They go hand-inhand. Consumer spending accounts
for more than two-thirds of our economic activity and the private sector
develops and nurtures the majority
of a country’s consumers through
job creation and entrepreneurship.
Yet, perception is greater than reality. Two years ago a public opinion
survey was conducted in 22 Latin
REPORT
American and Caribbean countries, including Jamaica. The survey
asked one question: “Government,
more than the private sector, should
be primarily responsible for creating
jobs. To what extent do you agree or
disagree with this statement?”
Almost seventy-eight percent
(77.5) of Jamaicans agreed with the
statement. Agreement ranged from
58.3 per cent in Haiti up to 90.4 per
cent in Paraguay, with countries such
as Mexico, Chile and the Dominican
Republic at 78.0 per cent, 80.0 per
cent and 87.7 per cent, respectively.
Those sub-groups that showed
strong support for the government
as the primary source of job creation
included: younger people within the
18 - 24 age group; persons living in
poor households; and those seeing
the economy as doing poorly. On the
other hand, individuals in wealthier
households significantly oppose a
primary role for government in job
creation.
During a recession, it is quite likely
that the government will outpace the
private sector in job creation at particular times in particular countries.
However, when one looks at China
with a GDP growth rate of nine per
cent in 2009, India with a 6.2 per
cent growth rate and Brazil at 5.2
per cent, one finds that all have vibrant private sectors. China, with
a labor force of 812.7 million, has
undergone a steady transformation
from a centrally planned economy
to a private sector led one over the
past 30 years. India has become a
world technology centre, driven by
a private sector of more than 200
million persons and entities. And
through its private sector, Brazil has
built one of the world’s largest retail
markets, dominated by huge supermarket chains.
While many have known for some
time that the private sector is a
necessary ingredient to economic
growth in Jamaica, I was pleased
to hear PIOJ Director General, Dr
Gladstone Hutchinson, say recently
that the Jamaican economy must be
transformed into a private sector-led
one, if the government’s Vision 2030
plan is to succeed.
17
22 Foreign Car Brands
in the Iran Market
18
REPORT
he Iranian government has put strong auto
import limitation to support domestic production; though Iranians are keen on paying too much money to buy luxury foreign
brand cars. They have extremely welcomed foreign
cars, this is while domestic firms have put all their
efforts to improve their quality and obtain their customers satisfaction.
Auto import to Iran is still low because of high import tariffs and customs duty, yet various kinds of foreign car brands in Iran auto market made it difficult
for people to choose their favorite car.
We review all foreign car brands which have entered Iran market and those which were planned to
come but did not.
T
Audi
Iranians got familiar with German Audi brand. Audi 80 and Audi
100 were first models of the famous and popular German brand that entered Iran
market. After the Islamic Revolution Audi could not
continue it activity in the country until five years ago
an enterprise called “Amic Technogy” introduced itself as the official dealership of Audi in Iran. There
occurred vast advertisements but nothing positive
happened in this regard.
Yet again “Ramak Khodro” official importer of Korean Ssangyong announced that it would import
Audi vehicle in 2011. This is while Audi sedans have
not yet been offered massively.
Audi which is a luxury subsidiary of German Volkswagen Group produces different classes and ranges of cars and we will introduce them below.
The 2013 Audi A4 is impeccably engineered for
driving. It has a dynamic exterior, leather appointed
interior, and a light yet responsive 2.0-liter four-cylinder TFSI engine for agility and efficiency. Add to
this available features like adaptive headlights, sport
seats, and Audi connect with Wi-Fi hotspot connectivity, and you have a car that meets your needs and
desires. The super sedan costs about 3540 euros
and competes with Mercedes-Benz class C and
BMW 3 series sedans.
The A5 marked Audi’s return to the compact executive coupé market since the (B3/B4) Audi 80-based
coupé model ended production in 1996. The B6/B7
A4 spawned a convertible variant but not a coupé.
For the fourth generation A4 (B8), Audi decided to
spin off the cabriolet, along with a new coupé and
four-door hatchback, into a nameplate of its own as
the A5.
The A5 is the third coupe in Audi’s line-up, following the second-generation TT and the R8. The A5
adopted design elements of the Nuvolari quattro
concept.
Ordering of the A5 and S5 began on March 6, 2007
and the first deliveries were made in June 2007.
Launch models included 3.2 FSI V6 engine multitronic and 3.0 TDI quattro 6-speed, with 1.8 TFSI
available in autumn 2007. The A5 Coupe comes with
a six-speed manual or an optional, eight-speed automatic transmission. Fuel economy is good for the
class, as the A5 Coupe gets up to 22/32 mpg city/
highway. The vehicle is priced 33350 euros.
With timeless elegance, modern technology and
confident performance, the Audi A6 redefines success. It stands out with available intelligent technologies like Audi MMI touch and Audi connect. It
pleases the crowd with the gratifying performance of
an Audi 3.0-liter TFSI engine. The car costs 38500
euros and competes with Mercedes-Benz class S
and BMW 5 Series in Iran.
For 2013, the 4.2-liter V8 engine featured in the
Audi A8 has been replaced by a supercharged V6
that delivers better performance. Beyond that, a
smaller yet more powerful turboV8 is also available.
Later, a diesel V6 will also join the A8 lineup. Mercedes-Benz class S, BMW 7 series and Maserati
Quattroporte are its major rivals.
The seven-seat Audi Q7 is more about performance, space and status than it off-road ability.
The Audi Q7 may now be getting on a bit (it first
debuted in 2006), but is remains an imposing car.
Inside, it offers a high driving position that gives a
commanding view of the road ahead that reflects its
exterior looks.
Plus, there’s no denying that the seven-seat interior is massive, even though the legroom in the last
row of seats is a little tight. It drives along quietly,
even at motorway speeds. The suspension can feels
a bit stiff at times, making the ride too firm for real
comfort, but the selection of V6 diesel engines all
offer impressive performance. The Q7 no longer
comes with a petrol option, but the 3.0-litre TDI quattro offers the best combination of performance and
economy.
First and foremost, the 3.6-liter V6 and 4.2-liter
V8 have been replaced by a supercharged 3.0-liter
TFSI V6. Available in two versions, the base 3.0-liter
unit produces 200 kW (272 PS / 268 hp) and 400 Nm
(295 lb-ft) of torque. It enables the Q7 to accelerate
from 0-100 km/h (62 mph) in 7.9 seconds, before hitting a top speed of 222 km/h (138 mph) or 225 km/h
(140 mph) with the optional adaptive air suspension.
The more powerful 3.0-liter V6 is lifted from the S4
sedan, it produces 245 kW (333 PS / 329 hp) and
440 Nm (325 lb-ft) of torque. 0-100 km/h (62 mph)
comes in 6.9 seconds and the top speed is 243 km/h
(151 mph) or 245 km/h (152 mph) with the adaptive air suspension. Both engines are rated at 10.7
l/100km (21.98 US mpg) in the EU test cycle - an
improvement of 12% and 16% (over the previous
engines).
19
REPORT
The Audi R8 is the German automaker’s current
top of the line model based on the Le Mans Quattro
concept car. Thanks to lightweight aluminum construction the mid engine super car weighed in at under 3,500 lbs when it was introduced in 2006.
The original 4.2 Liter FSI V8 powered car made
420 HP and 320 lb-ft of torque sprinting the four
wheel drive dream machine from 0 to 60 MPH in 4.4
sec, through the quarter mile in 12.8 sec at 113.2
MPH and up to 187 MPH while an updated version
will offer a Lamborghini 5.2 Liter V10 making 520
HP and 390 lb-ft of thrust and gets to the 60 MPH
mark in only 3.9 seconds and all the way up to 196.4
MPH.
The luxury sedan costs 121 thousand euros.
Alfa Romeo
Alfa Romeo is one of the most famous Italian cars hitting Iranian streets
since 2012. Alfa Motors has been announced as the official dealership of
Alfa Romeo sedans in Iran. The price of this luxury
car has been variable at Iran market place.
Opel
German “Opel” was one of the most
controversial car brand entered Iran
market but it failed to keep on driving
on Iranian roads. While Iranian people eyed Opel hit their city’s streets,
American GM made a successful
takeover bid for Opel Company and it inhibited Opel
imports to Iran due to international sanctions against
the Islamic Republic.
Smart
Mercedes’s
subsidiary
Smart was one of disappointed companies that
could not offer its small and fuel efficient cars to Iran
market. First it was planned to import the sedan via
Pars Khodro and “Setareh Iran”, but the hurdle were
too much on its way.
Mercedes Benz
It is worthy to take a look
at background of strong and
famous German MercedesBenz Company in Iran. The
company’s products have long been present and
welcomed at Iran auto market and different classes
of people like its sedans. Its accurate engineering
and high quality is well-known among its customers
and people. The company has set up large research
centers which are well-equipped and bigger that its
factories and production lines. According to statistics, Mercedes-Benz net revenue stood at 1065 bil-
20
lion euros during the year 2011.
Before production of Paykan in Iran, the companies of ex-Iran Nasional (now Iran Khodro) and
Khavar had been producing Bus 302 and Benz
trucks respectively.
Mercedes-Benz bought 30 percent of Tabriz Diesel Engine Manufacturing Co. shares. The company
aimed to occupy Middle East, part of African and
Asian market through manufacturing its products in
Tabriz Diesel Engine Manufacturing Co.
The first Benz sedan entered Iran in 1941 and was
Benz 170 from W15 series. At that time a few of such
vehicles were imported to Iran and particularly used
in Qajar court. In addition, earliest mass import of
Benz products started in 1353 by importing Benz
buses. During first Pahlavi era, rich people, politicians and courtiers well like the newer W136 series
known as V170 and its limousine and crook vehicle
were famous as luxury-oriented West.
For the period of final years of 1950s, the relation
between Iran and Benz Company developed drastically; so that many Ponton models (W121, W120)
known as 180 and 190 in Iran were imported to the
country. The mentioned cars were well equipped
with facilities like radio and leather seats and were
highly admired by Iranian people.
Since 1965, contemporary with international market Benz W110 known as Fintail was offered in Iran.
Later Benz 190, 200 and 230 entered the country,
which were appreciated by the people. Of that period, businessmen started to import super luxury
W111 sedans from the new S class vehicles.
The Mercedes-Benz products were on the top of
Iran market until the Islamic Revolution of Iran. After
that for Iraq War against Iran and bad economic conditions of people the public could not afford to buy
foreign brand card especially those of MercedesBenz. Yet when American brands left Iran, the way
was paved for European car firms to have a more
colorful presence at Iran market. While MercedesBenz introduced class E sedans during 1990s, people preferred to buy Volkswagen and Opel products
instead of expensive Benz vehicles whose upkeep
was very high.
Thereafter when Iranian people upgraded their
economic conditions and enjoyed better facilities,
Mercedes-Benz decided to resume its relation with
Iran’s profitable market. In 2001 Setareh Iran Company was introduced as the official dealership of
Mercedes-Benz products in Iran. It was planned in
2006 to produce class E Benz sedans, buses, minibuses, ambulances and firefightingvehicles in Iran
Khodro subsidiary “Top Khodro”. But u fortunately
after a while the company stopped Benz E class production and it seemed that Mercedes-Benz and Iran
Khodro had no further program to continue their ties.
Iran Khodro replaced Mercedes-Benz production
line with Roa (RD) which was more affordable by the
REPORT
public. It was while dealers have kept on importing
Benz super luxury sedans with extremely high prices. Its customers are now limited to very rich people.
After Mercedes-Benz sold stake of Setareh Iran
Co. to Iran Khodro, Benz production gradually
stopped in Iran. In the previous year, car prices increased dramatically and this included all Iran made
cars and imported foreign brands.
Last summer high dollar prices added to the crisis,
on the other hand importers bought and imported
foreign cars with subsidized exchange rate and sold
them in Iran with free exchange rate. On the other
hand people and experts criticized expanding aristocracy and wealth seeking in the country. Finally
in January 2013 the Parliament approved the law
which prohibits import of foreign cars with more than
2500 cc engine capacity.
BMW
BMW have long been presented
and popular in Iran car market. For
many years Nouriani enterprise was
the official importer of BMW sedans,
but it transferred its dealership to
Persia Khodro. All BMW products cost more than
100 billion rials.
Peugeot
Iran auto industry was formed
after the country started to produce famous Paykan, but its car
sector developed dramatically
cooperating French Peugeot Company. The Iranian
company modeled Peugeot products to produce different models of Samand and Peugeot vehicles. If
Iran Khodro did not cooperate with Peugeot it would
confront grave problems.
This is while the well-known Peugeot faced serious crisis after it announced alliance with Citroen,
Saipa’s close partner. The company experienced
one of its most profitable businesses with Iran
Khodro and withdrawing it made many losses for the
French giant auto maker.
During the years before alliance with Citroen,
Peugeot manufactured different models and classes
of cars in Iran.
The Peugeot 404 is a large family car produced
by French automobile manufacturer Peugeot from
1960 to 1975, with the exception of the truck which
was sold until 1988. It was also made under license
in various African countries until 1991 (in Kenya).
Styled by Pininfarina, the 404 was offered initially as
a saloon, estate, and pickup. The 404 was fitted with
a 1.6 L petrol engine, with either a Solex carburetor
or Kugelfischer mechanical fuel injection or a 1.9 L
diesel engine available as options. Introduced at the
Paris Motor Show as an option was the inclusion of
a 3-speed ZF automatic transmission, similar to the
unit already offered on certain BMW models, as an
alternative to the standard column-mounted manual
unit. Peugeot’s French production run of 1,847,568
404s ended in 1975. Still relatively common in developing nations (especially in pickup form), a grand total of 2,885,374 units had been produced worldwide
at the end of production.
Everybody can remember popular Peugeot 504
which replaced 404 models. The Peugeot 504 was a
large family car manufactured by Peugeot between
1968 and 1983, with licensed production continuing until 2006. Huge suspension travel, and great
strength, meant that the 504 was suited to rough
road conditions, and the car proved extremely reliable in conditions found in Africa, Asia, Australia and
the like.
The Peugeot 205 was a super-mini produced between 1983 and 1998. It was declared ‘Car of the
Decade’ by CAR Magazine in 1990. It also won
‘What Car?’s Car of the Year for 1984. Early 205s
used the X engine from the older Peugeot 104, although these were later replaced with the newer XU
and TU-series engines, which were of PSA design.
Engines ranged from 954 cc to 1905 cc engine displacement, in carburetor or fuel injected petrol and
diesel versions. The sedan was highly welcomed in
Iranian market and rivaled different models of German Golf, Corsa and Passat sedans.
There is no doubt that Peugeot 405 was the most
successful family car during 1980s. The Peugeot
405 is a large family car released by the French automaker Peugeot in July 1987 and which continues
to be manufactured under license outside France.
It was voted European Car of the Year for 1988 by
the largest number of votes in the history of the contest. Its appearance is similar to the Alfa Romeo 164,
launched the same year and also styled by Pininfarina. Iran Khodro also produces several models
derived from the 405. The Peugeot RD is a rear
wheel drive car which has a 405 body and mechanical parts from the Paykan. The Samand, which was
designed to be a “national car” for Iran, is also based
on the 405 platform.
The Peugeot Pars also known as Peugeot Persia
is an Iran Khodro product. After 10 years of manufacturing Peugeot 405 in Iran Khodro Company,
Peugeot Persia was designed as a facelift of the
405. Peugeot Persia was soon renamed to Peugeot
Safir and eventually Peugeot Pars because of local
copyright problems. Peugeot Pars had been made
in 3 models Pars, Pars 16V, and Pars ELX. The 16V
and ELX models use a more powerful PSA 16 valve
engine and a few extra facilities. The PSA-borrowed
engine is XU7JP (code LFZ, known as L3 in Iran)
1.8 L SOHC with 2 valves per cylinder capable of
producing a maximum power of 101 PS (74 kW) at
21
REPORT
6000 rpm and a maximum torque of 153 Nm at 3000
rpm which is controlled by SAGEM SL96 ECU. The
same engine was already in use in the PSA’s Peugeot 405 1.8 SR, Peugeot 306 1.8i 8v, Citroen Xantia
1.8i 8v, and Citroen Xsara 1.8i 8v.
The Peugeot 206 is a super-mini manufactured
from 1998 to 2010. Even though the 206 had finished production in most markets by 2010, it is still
available as the 206+, with front and rear styling
that resembles the Peugeot 207. During the early
1990s, Peugeot decided not to directly replace the
Peugeot 205, citing the reason that super minis were
no longer profitable or worthwhile. Instead, Peugeot
followed a unique strategy and decided that its new,
smaller, super mini, the Peugeot 106 (launched in
1991) would take sales from the lower end of the
205 range while the lowest models of the Peugeot
306 range, launched in 1993 to replace the Peugeot
309, would take sales from the top-end 205s. Between the 106 and 306, Peugeot hoped that the 205
would not need to be replaced, and could be phased
out slowly, while customers who would normally
plump for the 205 would continue to have a choice
with either a smaller or larger car.
Unfortunately for Peugeot, this strategy did not
work. With the 205 phased out, other super minis like
the Ford Fiesta and Volkswagen Polo continued to
sell well and even increased in popularity, and without a direct competitor to these cars Peugeot was
losing sales fast. A new super mini was required,
and the 206 was launched in 1998 as a somewhat
belated replacement for the 205.
To be honest, Peugeot 206 has been the most
popular car in Iran and all ranges of people including rich and middle-class, young and old, men and
women like to have one. Yet it seems that the story
of the well-liked car would not have a good ending.
At first the production number declined to about half
and its price increased by two folds. Until the year
2001, 206 productions increased dynamically, but
now its destiny in dim and unknown.
In the year 2000, giant French automaker unveiled
its new product called CC (Coupe Convertible)
which was a pattern to manufacture Peugeot 206
SD (initially known as Peugeot Aryan). One or two
years ago, in line with nationalizing Iran auto manufacturing industry, Iran Khodro revealed a new sedan named Runa which is the impression of 206 SD.
The Peugeot 207 is a super mini produced from
2006 to 2012. It was unveiled in January 2006 and
launched in April. It was replaced by the 208 in 2012.
The sedan is known as 206+ or the facelift of 206 in
Iran.
The 407 was the successor to the hugely successful Peugeot 406, and was launched in 2004. The
streamlined design of the car was seen as quite radical, its most distinctive features being its large front
22
grille and the steeply raked screen pillars. It seemed
that the sedan was a copy of Citroen Xantia and C5.
The new model of Peugeot was not successful in
Iran.
Porsche
Porsche is one of the most famous
German super sport cars which were
offered in Iran market by Moin Motors. The prices of Porsche products
are far above the ground in Iran. For
example the lowest price for Porsche
Panamera models is 500 billion rials.
Toyota
Japanese Toyota car brand in
exceedingly admired by its Iranian
customers, so that though its prices are increasing considerably and
its official dealership Irtoya does
not offer strong after sale services,
the car is being sold well in Iran market. On the other
hand several car traders put some hurdles on the
way of Irtoya.
Renault
French Renault is active in Iran
by offering Tondar sedans via “Renault Pars” and Megan vehicles via
“Pars Khodro”. It also cooperates
with “Negin Khodro” to introduce its
new products in Iran.
SEAT
SEAT is the sole active Spanish
brand with a mass production potential and capability of developing its
own models in-house. It was planned
to import and manufacture SEAT sedans in Iran by Dastan Industrial Development Co.,
but the plan was cancelled for unspecified reasons.
Ssangyong
SsangYong Motor Company
is the oldest and the fourth largest South Korea-based automobile manufacturer. The name
SsangYong means double dragons. In 1991 it started a technology partnership with Daimler-Benz. The
deal was for SsangYong to develop an SUV with
Mercedes-Benz technology. This was supposedly to
allow SsangYong to gain footholds in new markets
without having to build their own infrastructure (utilizing existing Mercedes-Benz networks) while giving
Mercedes a competitor in the then-booming SUV
market.[7] This resulted in the SsangYong Musso,
which was sold first by Mercedes-Benz and later by
REPORT
SsangYong. SsangYong further benefited from this
alliance, long after Daimler-Benz stopped selling
the Musso, producing a badge engineered version
of the Mercedes-Benz MB100, the Istana and using
Daimler designs in many other models.
Suzuki
Iran Khodro was the first Iranian
car manufacturer that won the dealership of importing and then manufacturing Suzuki sedans. Initially
Suzuki Grand Vitara entered Iran streets and later
the famous Kizashi hit Iran market.
Kia
Kia Motors was one of the most
popular foreign brands in Iran.
“Atlas Khodro” imports and offers
different models of Kia products to Iran market.
Lexus
The eye-catching products
of luxury subsidiary of Toyota,
Lexus, run on Iran streets. This
is while for many years no new
Lexus models have been imported to the country.
Land Rover
Iranian businessmen began
talks with British Land Rover
to import its subsidiary product
Range Rover. Yet talks were not successful.
over 3.6 million vehicles worldwide. Its products are
put forward in Iran market by “Asan Motors”.
Mitsubishi
Mitsubishi vehicle first entered Iran
during 1970s by “Almasdaran Enterprise”. Now years later the news says
“Aryan Motors” is planned to import
new Mitsubishi sedans.
Honda
Honda Motor Company, Ltd. is
a Japanese public multinational
corporation primarily known as a
manufacturer of automobiles and
motorcycles. “Family Motors” is to import some models of Honda to Iran. It is predicted that Honda Civic
will be highly welcomed by Iranian customers.
Mansory
Mansory is a luxury car modification firm based in Brand, Germany. Besides luxury cars, they
also work on performance supercars, luxury SUV
and custom bike. The company has intended to start
a joint car and spare parts production with Iranian
car and auto part manufacturers.
Maserati
Maserati is the most expensive car in
Iran auto market. The Italian super sport
car which is imported by “Artatak Motors”
and the price of some of its models reach
more than 600 billion rials.
Mazda
As “Bahman Car Manufacturing
Group” offers Mazda 3 models, the
brand has proper conditions in Iran
market place. Acoording to news
the company has planned to unveil Mazda 6 in Iran.
Hyundai
The Hyundai Motor Company is another South Korean automaker which was successful
in Iran. Hyundai was founded
in 1967 and it, along with Kia, together comprise the
Hyundai Motor Group, which is the world’s fourth
largest car maker based on annual vehicle sales
in 2010. In 2008, Hyundai (without Kia) ranked as
the eighth largest automaker. In 2010, Hyundai sold
2
23
Off-Roading like a
Gentleman: 10 Luxury
SUVs on Their Way
24
ARTICLE
Crossovers are welcome right now, and wagons have the hearts of enthusiasts, but SUVs still reign supreme in the luxury market. And competition among these high-dollar SUVs is heating up, with revised old
models stepping up to meet new entrants. Here are ten high-end SUVs to watch for as they arrive over the
next couple of years.
can get to enjoy the madness of this high-performance,
ultra-lux people mover. The 2014 Sport’s base engine,
a 340-hp supercharged V-6, is nothing to sneeze at.
It’s the supercharged, 510-hpr, 0-to-60mph in 5 seconds 5.0-liter V-8 in the Autobiography and (appropriately named) Supercharged models that is raising eyebrows. A V-8-equipped 2014 Range Rover Sport just
set a record time for a production SUV performing the
Pike’s Peak hill climb at 12 minutes, 35 seconds—comparable with some sports cars.
2015 Audi Q7
It’s easy to forget that the current Q7 debuted in
2005; most likely that’s due to the fact that it debuted
in 2005 and has been in production for seven years
without a replacement (although a facelift in 2009, pictured here, kept it fresh). That changes with the coming
second-generation Audi Q7. Depending on the rumor
mill you happen to visit on any given day, the new Q7
will either be presented in 2015 for a later release or is
scheduled to hit the market in the summer of 2014 as a
2015 model. In any case, the new Q7 looks to achieve
a targeted weight loss of 800 pounds over the current
model, and could be offered with a hybrid powertrain
option.
2014 Land Rover Range Rover Sport
Get your orders in now; the all-new 2014 Range Rover Sport is scheduled for its first deliveries this summer,
and buyers are going to want every extra second they
2014 BMW X5
The third-generation of BMW’s X5 SUV—sorry, Sport
Activity Vehicle in BMW parlance—is scheduled to arrive before the end of 2013 after an official debut at
September’s Frankfurt Auto Show.
We know a lot about this new X5 right now, however,
including the coming first-time-ever option of a rearwheel-drive X5, and a turbocharged diesel X5 expected
in the first quarter of 2014. The X5 will be greeted by a
more fractious, subsegmented, and highly competitive
luxury SUV market than ever before; by offering a multitude of powertrains and interior options (the choice
of a 40/20/40 or 70/30 rear bench, for example) BMW
hopes to draw customers away from less flexible rivals.
2016 Mercedes-Benz MLC
The BMW X6’s combination of SUV capabilities,
ride height, and blobby—sorry, sporting—looks have
spawned a myriad of similar designs, and it looks like
Mercedes-Benz is ready to throw its version in the ring.
The MLC is based on the current M-Class—pictured
here—and possibly slated for production in 2015 for a
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ARTICLE
2016-model-year release. But little is known about the
MLC yet, down to whether the MLC moniker will even
be its official name. Rumors have been swirling for over
a year, and there is plenty of time for powertrains to be
mulled over and for revisions to the M-Class to affect
what the MLC will become.
2014 Cadillac Escalade
The Escalade has lived a complicated life. Over the
past fifteen years, the Escalade was simultaneously
the biggest hit for Cadillac in a generation and a setup
for every “bling” reference your parents have made in
an uncomfortable attempt to relate to you.
Just when it seemed that the Escalade had outlived
its relevance, here comes a revitalized Cadillac riding a
hot streak and ready to make the Escalade a legitimate
luxury SUV contender.
Spy shots haven’t revealed everything about the
2014 Escalade yet, but what we’ve seen so far indicates a turn toward a more mature, elegant SUV.
Combined with Cadillac’s CUE infotainment system
and recent success with high-end interiors, the 2014
Escalade could be flying in a little bit under the radar
compared to its overly chromed reputation.
26
Bentley EXP 9F
Bentley debuted the EXP 9F Concept at the 2012
Geneva Auto Show, and at the time its only real delay
in hitting dealerships seemed to be the number of preorders that the company was waiting to get before beginning a production run. Reports surfaced late in 2012
of a pending redesign, however, and with the EXP 9F
likely to be built on the underpinnings of the new Audi
Q7 coming to the market as a 2015 model, there certainly is time to do so. There is no confirmed powerplant
for the Bentley SUV, but look for a big-displacement
engine to differentiate the Bentley from the Q7.
2016 Audi Q8
A top-of-the-line luxury SUV meant to sit above Audi’s Q7 has been discussed for years, with little solid
information to show for it. That changed ever so slightly
recently when Audi confirmed a coming Q8 SUV, built
on the platform of the coming 2015 Q7. With its sights
set on the Range Rover Sport, Audi’s new Q8 will be a
sportier Q7, with the coupe-inspired styling that will be
seen in the new Q6 crossover. There are still rumors of
an Audi Q9, which would in effect be a larger Q7 built
onto the Q7’s chassis. At this stage, it appears that the
Q8 is intended as Audi’s SUV range-topper, as the A8
is for its cars, so no Q9 is in the offing.
ARTICLE
mance-focused tuning in line with that of the Porsche
Cayenne or the BMW X6.
2014 BMW X7
With a new X5 set to roll out, BMW appears ready to
debut a brand-new, larger luxury Sports Activity Vehicle. Recent spy photos have caught a big BMW SUV
on the road, with a test driver allegedly calling the vehicle a 2014 X7. So far that’s all we know for sure about
the X7, so the rest is speculation: trim levels, engine
options, M-Sport package—we can likely expect these,
but we don’t know for sure. Potentially more interesting
is that the success of an X7 might see a Rolls Royce
SUV built on the same platform, which would melt the
eyes of luxury-sedan purists the world over
2017 Lamborghini Urus
The first Lamborghini SUV in decades has been
called a game-changer by Lamborghini CEO Stephan
Winklemann. The insane performance standards of
contemporary Lamborghinis have set an extremely
high bar for the Urus, and Lamborghini is putting forth
every effort to reach its goals—including having the
ability to produce enough of them. The Urus project is
set to double Lamborghini’s annual volume, and Winklemann promises that the result will be an SUV that
fits in with the wider Lambo lineup. Likely to ride on the
chassis of one of its Volkswagen Auto Group brethren
(Audi Q7, Volkswagen Touareg, Porsche Cayenne),
expect lots of carbon fiber and other weight-saving
materials and a screaming-loud) powerful engine. The
Urus is confirmed for 2017; set your clocks.
2015 Maserati Levante
It’s going to take some time to get used to the Maserati Levante. Not only is the Levante the first SUV
from Maserati, but since 2011 we’ve been seeing it as
a concept design called the Kubang and frankly, we’ve
all gotten used to calling it that.
Built on the new Jeep Grand Cherokee platform, the
Levante will draw its power from a twin-turbocharged
3.0-liter V-6 with 410 hp or a twin-turbocharged 3.8-liter
V8 with 530 hp, with Europe getting a additional turbodiesel option. Maserati’s Q4 all-wheel drive will come
with the Levante, which should see a more perfor-
27
Auto Industry Outlook
and Review
28
REPORT
he auto industry is highly concentrated. The
top 10 global automakers account for roughly
80% of the worldwide production and nearly
90% of total vehicles sold in the U.S.
In January 2013, General Motors Company ( GM )
led with an 18.7% market share in the U.S., followed
by Ford Motor Co. ( F ) with a 15.9% market share,
Toyota Motors Corp. ( TM ) with a 15.1% market share,
Chrysler-Fiat with a 11.3% market share, and Honda
Motor Co. ( HMC ) and Nissan Motor Co. ( NSANY )
at the last spots with 9.0% and 7.8% market shares,
respectively.
Toyota recaptured the sales crown from General Motors by selling 9.75 million vehicles globally in 2012,
which exceeded GM’s sales of 9.29 million vehicles.
Germany ‘s Volkswagen AG ( VLKAY ) came third with
sales of 9.07 million vehicles for the year. Toyota’s victory can be attributed to its impressive product lineups
and marketing initiatives.
Toyota lost its No.1 position to GM in 2011 after
gaining the title from GM in 2008. The loss of crown
was driven by declining reputation due to a series of
safety recalls as well as negative impact from natural
disasters in Japan and Thailand in 2011. However, the
automaker had vowed to regain the top position by increasing its dependence on the non-U.S. markets, especially the high growth emerging markets.
T
OPPORTUNITIES
To remain competitive, the automakers will need to
design vehicles that will cater to consumers in both mature and emerging markets while manufacturing them
at low-cost using the most advanced technology.
For example, Ford has undertaken “One Manufacturing” strategy, which aims at producing multiple models
from plants across the world in order to save production costs and fast adaptation to changes in consumer
tastes. The automaker anticipates producing 4.5 models at each of its plants by 2015, up from 3.6 models
currently.
Further, the automakers are concentrating on offering more optional features (which will save money on
gas) even on the small and less gas-guzzler vehicles in
order to attract buyers. The sale of optional features is
helping them offset lower profit margins for small cars
relative to large trucks.
The automakers continue to shift their production facilities from high-cost regions such as North America
and the European Union to lower-cost regions such as
China, India and South America. According to a study
by CSM Worldwide, China and South America together
are projected to represent more than 50% of growth in
global light vehicle production in the auto industry from
2008 to 2015.
The role of governments is highly significant. Governments in all major countries have become active
auto industry players. Their energy and environmental
policies will be strongly responsible in molding the auto
industry in the coming years.
In late 2011, 13 major automakers, including Ford,
GM, Chrysler, BMW, Honda, Hyundai ( HYMLF ),
Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan,
Toyota and Volvo, have signed letters of commitment
with the U.S. Government to upgrade the fuel economy
standard of cars and light-duty trucks to 54.5 miles per
gallon (mpg) by 2025.
The new standard is more than double the Corporate
Average Fuel Economy (CAFE) standard of 24.1 mpg.
It is expected to save 12 billion barrels of oil and curtail
oil consumption by 2.2 million barrels per day, which
accounts for half of the oil imported by the U.S. from
OPEC countries on a daily basis.
The new standard also aimed at reducing carbon pollution to 163 grams per mile of CO2. With this, more
than 6 billion metric tons of greenhouse gas will be
curbed over the time span of the program, which accounts for more than the amount of carbon dioxide
emitted by the U.S. in 2010.
Pent-Up Demand and U.S. Market Recovery
Strong pent-up demand due to aging vehicles on the
U.S. roads along with falling unemployment rate have
been the key factors in driving the auto sales in the
U.S. Average age of vehicles on U.S. roads increased
to 11.3 years in January 2013 from 10.8 years in 2012.
Banks were also friendlier as they offered greater access to loans with lower interest rates.
Auto sales in the U.S. grew 13.4% to the five-year
high of 14.5 million vehicles in 2012 including a 9% rise
to 1.4 million in December last year. Further, in January
2013, auto sales rose 14.2% to 1.04 million vehicles
that translate into a seasonally adjusted annual rate
(SAAR) of 15.3 million units for the year, up about 1
million units from 2012.
GM expects a 7% rise in industry sales in 2013.
Meanwhile, Ford predicted an 8% gain in the year,
which reflects more than threefold rise compared with
the overall economic growth of 2%-2.5% forecasted by
the automaker.
Asia Promises High Growth
The Asian countries, especially China and India, are
expected to account for 40% of growth in the auto industry over the next five to seven years being the rapidly growing economies. According to Global Insight -- a
U.S. based provider of economic and financial information -- 14.7% of growth is expected to come from India
and 8.3% from China by 2013.
Ford anticipates global sales to expand by 50% to 8
million vehicles by 2015 given the potential growth in
Asia, mainly China and India; and rising demand for
29
REPORT
small cars. The automaker anticipates small cars to account for 55% of the total sales by 2020 compared with
48% presently. One third of the small car sales are expected to come from Asia.
The Chinese automakers have been struggling hard
to enhance their global profile by upgrading their technology to meet international standards. Meanwhile,
Indian automakers are also sallying into international
markets by introducing their innovative products that
could meet consumers demand abroad.
In late 2012, Ford announced plans to boost exports
of its engine production from India by shipping them
for the first time to Europe. Currently, the automaker
exports 40% of its Indian-made engines and 25% of
its Indian-made cars to 35 countries. The company’s
plan to rev up Indian exports is in line with its capacity expansion programs in the country. The company
expects to manufacture 450,000 cars and 600,000 engines in India by 2015.
Ford already pumped in $2 billion to build manufacturing facilities in India. However, it is still lagging behind Hyundai Motor and Maruti Suzuki India Ltd, which
occupy the lion’s share in the Indian car market.
Auto sales in China had grown at a double-digit pace
since 1999, except in 2008 when the global economic crisis crept in. In 2009, China overtook the U.S. as
the biggest auto market in the world by sales volumes
when the Beijing government introduced a stimulus
package, including tax incentives for small cars. China
accounted for a third of light vehicle sales growth in the
last five years.
However, the incentives were scrapped in 2011 and
the Beijing government imposed quotas on new car
registrations in order to control the traffic congestions.
In 2012, sales in China grew 4.3% to 19.3 million units,
including a 7.1% gain in December to 1.8 million units.
Despite being higher than the 2011-level of 2.5%, sales
growth is lower than the 8% growth projected by China
Association of Automobile Manufacturers (CAAM) as
well as the double-digit growth in 2009 and 2010.
The lower-than-expected growth was attributable to
a sluggish economy, rising fuel costs, weak Japanese
automakers sales owing to a conflict between Beijing
and Tokyo over a group of uninhabited islands in the
East China and drastic steps take by few major cities to
curb traffic congestion and emission level.
Auto sales in the country are expected to improve if
the government renews some of its policy incentives
that helped the country overtake the U.S. as the biggest auto market. It is rumored that the government
would soon resume paying subsidies to rural consumers who are willing to trade in old vehicles for new and
fuel-efficient vehicles.
According to CAAM, auto sales in China are expected
to rise 7% to more than 20 million vehicles in 2013, led
by strong demand for passenger vehicles and economic recovery. The association believes SUVs will remain
30
the fastest-growing segment in the year while commercial vehicles will record a moderate gain in sales.
WEAKNESSES
Although automakers continue to focus on shifting
their production facilities to new regions driven by cost
and demand factors, developing the supplier networks
remains one of the greatest challenges faced by them.
Existing suppliers to automakers often lack the financial strength to expand capacity in new markets. On the
other hand, auto parts suppliers are sensitive to technology transfers to local third parties, which can give
rise to low-cost competitors.
Since 1999, more than 20 of the largest global auto
parts suppliers have filed for bankruptcy. The financial
condition of the majority of auto market suppliers continues to deteriorate, resulting from a historically weak
demand and high dependence on automakers.
Thus, despite the government’s sizable investment
in the industry, it is likely that there will be auto parts
suppliers who are unable to restart operations due to
a lack of sufficient working capital even as automakers
REPORT
start production. According to the Original Equipment
Suppliers Association, 12% of the auto industry suppliers do not have sufficient working capital to support a
10%-25% expansion in production.
High dependence on automakers makes the auto
market suppliers vulnerable to several maladies, primarily pricing pressure and production cuts. Pricing
pressure from automakers constricts parts suppliers’
margins. On the other hand, production cuts by automakers driven by frequent market adjustments negatively affect their operations.
Some of the auto industry suppliers who have a high
reliance on a few automakers such as General Motors,
Ford, Chrysler and Volkswagen include American Axle
and Manufacturing (AXL), Meritor Inc. (MTOR), Goodyear Tire and Rubber Co. (GT), Magna International
(MGA), Superior Industries (SUP), Tenneco Inc. (TEN)
and TRW Automotive (TRW).
Future of Green Cars Looks Bleak
Rising fuel prices and global warming have turned attention to the auto industry that either rely less on tradi-
tional fossil fuels or use cheaper renewable sources of
energy. Thus, “green” alternatives such as fuel-efficient
electric vehicles (EVs) and hybrid vehicles will attract
consumers in the affluent countries while flex-fuels
such as ethanol and natural gas will be highly demanded in the emerging auto markets due to their suitability
with the local climate and resource base.
Despite the U.S. Government’s continued effort to
promote plug-in-hybrids or EVs, the future of green
cars looks bleak, at least in the near future.
Globally, the hybrid market is ruled by Toyota (which
includes the highly acclaimed Prius) and Honda (includes Civic and Insight hybrids). Meanwhile, other automakers such as Ford, General Motors and Nissan are
also aggressively pursuing a plan to push hybrid sales.
Some of the well-recognized “green” cars include the
Ford Focus, GM Volt, Nissan Leaf and Daimler AG’s
(DDAIF) smart USA micro EV. U.S. is the largest hybrid
car market in the world with sales accounting for 60%70% of global hybrid sales.
Many leading automakers took steps in the last one
and half years to push green car technology. In late
2011, Ford and Toyota have signed a memorandum of
understanding on the equal product development collaboration for developing a gas-electric hybrid engine
for pickup trucks and sports utility vehicles (SUVs),
which is expected to be marketed by the end of this
decade.
In August 2012, Ford revealed its plan to invest $135
million to develop key components, including advanced
battery systems, for its next-generation hybrid-electric
vehicles. The automaker is looking forward to double
its battery-testing capabilities to 160 individual batterytest channels by 2013. Ford aims to reduce cost of its
current hybrid system by 30% compared with its previous-generation system. It also plans to triple production capacity of electrified vehicles by 2013.
GM also plans to manufacture a luxury electric car
dubbed ELR based on the technology used in its Volt
plug-in hybrid for its Cadillac brand as a part of its longterm goal to become a leader in the fuel-efficient vehicles market. The automaker intends to manufacture
500,000 vehicles per annum by 2017 that will include
some of electric technology.
The vehicles would mainly include plug-in hybrids
such as Chevrolet Volt, apart from pure electric vehicles such as Chevrolet Spark EV that will go on sale
in 2013. The company also plans to push its eAssist
system technology in its new vehicles. The eAssist system boosts fuel efficiency by 25% in gasoline-powered
vehicles.
However, the industry has witnessed some notable
adverse developments in the drive for green technology. In January 2013, the U.S. Department of Energy
(DOE) backed off President Barack Obama’s stated
goal of putting 1 million electric cars on the road by
2015 due to weaker than expected demand for plug-
31
REPORT
ins/EVs. According to Hybridcars.com, plug-in/EV
sales constituted a meager 3.3% of the overall sales in
the U.S. in 2012.
The weak demand for plug-ins/EVs has led some
lithium-ion battery makers file for bankruptcy protection
in 2012. They include MA-based A123 Systems Inc.
and NY-based EnerDel, despite both being DOE grant
recipients (A123 - $249.1 million; EnerDel - $118.5 million). It also led another DOE grant recipient (in fact,
the third largest with $161.0 million), Dow Kokam, to
be written down by chemical behemoth Dow Chemical (DOW), who jointly operated the entity with TK Advanced Battery LLC since 2009.
Safety Recalls
Since November 2009, Toyota recalled about 20 million vehicles globally, surpassing all other automakers. Few months back, the automaker had announced
a major worldwide recall of 7.43 million vehicles that
included more than a dozen models manufactured between 2005 and 2010. The recall was related to faulty
power window switches in the vehicles that can cause
fire because they did not have grease applied properly
during production.
In 2012, the Transportation Department of U.S.
slapped a fine of $17.35 million on Toyota due to late
response regarding a defect in its vehicles to safety
regulators as well as late recall of those vehicles. According to the department, it was the maximum allowable fine under the law for not initiating a recall in a
timely manner. The latest fine adds to $48.4 million imposed by the U.S. government on the company in 2010
due to late recall of millions of defective vehicles.
Toyota would also need to pay $1.1 billion to settle a
class-action lawsuit related to complaints of unintended
acceleration in its vehicles. According to a plaintiff lawyer, the settlement is one of the largest in a lawsuit in
the history of automotive industry. The lawsuit blamed
Toyota’s defective electronic throttle-control system
rather than floor mats and sticky accelerator pedals
for unintended acceleration, resulting in a crash. The
settlement would pacify 16 million owners of Toyota,
Lexus and Scion of model years 1998 to 2010.
In the spate of recalls following Toyota’s, other automakers’ recalls also came into the limelight. They include Chrysler, Ford, GM, Honda and Nissan. Among
them, GM recalled most frequently.
According to the European Automobile Manufacturers’ Association (ACEA), car sales in Europe reached
its lowest level of 12.05 million units in 2012 since
1995, indicating a year-over-year decline of 8.2% due
to the sagging demand for cars, as highly indebted
banks were reluctant to finance new car purchases for
customers. The decline was the steepest in the Euro
zone, where car sales dipped 11.3% to roughly 9 million units, according to Reuters.
Car sales in December last year fell for the straight
15th month and at the fastest pace since October
2010. As many as 799,407 vehicles were sold during
the month, falling short of the 2011-level by 16.3%.
Most of the major EU markets registered a doubledigit fall in sales in December. Sales tumbled 14.6% in
France, 16.4% in Germany, 22.5% in Italy and 23.0% in
Spain. The U.K. was the only market that came up with
sales growth of 3.7% in the month.
The U.S. automakers General Motors and Ford saw
the steepest decline in sales among all the major automakers operating in the continent. Each of their sales
shrank 27% in December. Meanwhile, Japanese automaker Honda sales slipped 6.7% in the month.
Among the European automakers, Volkswagen -- the
biggest in Europe -- recorded a 15% decline in sales
in December, driven by a 20% fall in sales of its namesake brand. Meanwhile, PSA Peugeot ( PEUGY ) and
Renault each posted a 19% fall and Fiat SpA ( FIATY )
recorded a decrease of 18%.
Most major automakers in Europe are resorting to job
cuts and plant closures, as it became no longer feasible for them to undertake full-fledged operations in the
continent. Unemployment in the EU reached 26 million
in November last year, while the unemployment rate
increased to 10.7% in the same month from 10% in
November 2011.
Among the U.S. automakers, Ford plans to shut vehicle and component plants in the U.K. and Belgium in
the next two years while General Motors would suspend car production at its Bochum plant in Germany
-- which employs 3,100 workers -- in 2016.
Among the European automakers, Renault plans to
retrench 7,500 jobs in France by 2016 while Fiat and
Peugeot have decided to eliminate 1,500 jobs each.
Among the Japanese automakers, Honda announced
plans to terminate 800 jobs at its South Marston plant
near Swindon in southwest England in the second
quarter of 2013.
Economic Crisis in Europe
The present Euro zone financial crisis has adversely
affected the operations of many global automakers, especially GM and Ford, who have a significant exposure
to the market. Car sales in Europe continued to be low
owing to weak consumer confidence on the back of a
weak economy triggered by the crisis.
32
The Auto Industry under
Trasformation
REPORT
Technology Drives Change
The pace of vehicle technology change is accelerating. Vehicles are changing in response to consumer
taste and expectations, higher safety standards, and
the drive toward a low-carbon future. When considering changes in automotive technology that support the
“greening” of automotive transportation, most people
think first about advanced powertrains, materials and
electronics. These three technology sectors play a significant role in the transformation of the new auto industry:
• Powertrain: The most noteworthy change is the reemergence of the electric vehicle. The development of
alternative forms of energy storage (primarily batteries)
is rapidly progressing. As powertrain technologies advance, the locations of powertrain production and employment may shift. It is possible that new propulsion
systems will be produced outside the region or require
fewer workers to produce the same number of propulsion systems. In either event (or both), a large-scale
displacement of traditional engine production by alternative technologies puts the tri-state region’s powertrain employment at risk.
• Materials: The need to make vehicles lighter for
improved fuel economy is a major driver in the development of automotive materials and forming. The U.S.
workforce’s strength is in steel, but less so in alternative materials. While there are only a few domestic metallurgy programs focused on lightweight materials, Europe and Asia have much more experience in this field.
• Electronics, software and controls: Technology in
vehicles will continue to increase at a rapid rate. Today,
electronics accounts for 25 percent of a vehicle’s value—tomorrow, 40 percent. Yes, the tri-state region is
poised to benefit from the research and development,
design, engineering, and systems integration side of
the electronics used in vehicles, but the area may lose
jobs to other automotive regions that are stronger in
electronics manufacturing, particularly producers in
Europe and Asia.
Workforce Implications
Today’s auto industry workers need systems thinking. That means that individuals must possess the soft
skills that enable cross-cultural communication, collaboration and teamwork. Production and skilled-trades
workers must adapt to an increasingly fast cadence of
new product, process and technology introductions.
Fortunately, the tri-state region has the educational
infrastructure to meet these challenges and prepare
the workforce for the occupations and careers of the
future. Out of nearly 900 accredited postsecondary institutions in the region, more than one-third offer programs relevant to the engineering, design, production
and maintenance of automobiles.
33
Automobile Technology
&
Innovation
34
REPORT
he product life-cycle for automobiles continues to shorten due to competitive market
pressures. Competitive market forces have
caused automakers to dramatically redesign
car models every four to five years.4
New technological developments have led to unique
and innovative designs for future automobiles. Automobile manufacturers use the development of new technologies to enhance performance capability, as well as
to create innovative designs. Alternative fuel technologies, such as electric hybrids and fuel cell cars, have
received considerable attention, and demonstrate attempts to design vehicles that are more energy efficient
and greatly reduce engine propulsion reliance upon
fossil fuels.
T
Electric Powered Vehicles
The movement towards electric powered vehicles
began as a result of the 1973 Oil Embargo, in which efforts were made to utilize electric battery technology to
power engine propulsion. However, problems and limitations regarding driving range, speed and a very small
market, all led to automakers GM, Ford, Honda and
Toyota discontinuing their electric vehicle programs
during the late 1990’s.
Hybrid Powered Vehicles
Hybrid vehicles combine two or more sources of
power, which are able to operate using a rechargeable
battery and gasoline. Production of gas-electric hybrids
signifies the first significant move away from total reliance on the internal-combustion engine in nearly a
century.5
Hybrid vehicles are highly fuel efficient and presents
the first major step toward fuel cell vehicles, according
to industry specialists. Japanese automaker Toyota,
is one of the auto industries leaders in hybrid vehicle
research and production with its Prius model. General
Motors, also involved in producing hybrid vehicles, will
be introducing and mass producing its hybrid model by
2007.6 Most major automakers plan to introduce hybrid
vehicles to the market within the next five years.
Fuel Cell Vehicles
Another automobile technology that is presently
viewed as the latest catalyst in future automobile technology, is fuel cell powered vehicles, in particular hydrogen fuel cell powered engines. Fuel cell systems
operate by compressing hydrogen made from natural
gas and gasoline, which is then converted to hydrogen
by on-board systems. 7
Automakers and suppliers worldwide are investing
substantially in the development of fuel cell systems.
General Motors (GM), Ford and DaimlerChrysler have
invested billions of dollars in a collaborative project to
develop hydrogen fuel cell technology. GM is perhaps
the most active in investing, as well as researching and
developing fuel cell technology. However, many industry specialists indicate that fuel cell technology will not
be available on the commercial market until the next 10
to 15 years.
There are, however, problems associated with hydrogen fuel systems which consist of:
• Fuel cell vehicles will be more expensive
• Fuel cell cars will require a new infrastructure for
vehicle manufacturing and maintenance
• Developing a system for producing and distributing
hydrogen fuel
Many uncertainties remain regarding the development and use of hydrogen fuel cell technology, as well
as addressing the major question on how to create a
viable infrastructure that supports the use of fuel cell
vehicles.
Advanced Product Design and Vehicle Operating Systems
Modern automobiles are increasingly relying upon
more advanced electronics, computer, and wireless
communication systems to assist drivers and enhance
safety. These technologies replace mechanical systems that power, steer and brake the vehicle. Most
vehicles have several computers, with high-end models having a half dozen or more that control functions,
which range from shifting gears to operating GPS navigational systems.
GM has introduced the Autonomy concept model,
which uses hydrogen fuel cell technology that powers electric motors in each wheel. The vehicle uses a
chassis and replaceable body, allowing greater flexibility and freedom in designing the interior. Internally, the
vehicle operates without pedals or dashboard, using
sophisticated computer and electronic systems to operate the vehicle.
Voice activation is another technology being developed for use in future vehicles. Voice activation systems are expected to operate internal climate controls,
open doors, and respond to navigational request by the
driver.
The next step in automobile electronic and communications technology is vehicle sensor technology.
Sensor technologies use radar or laser technology to
control systems that detect vehicles in front which then
automatically slow down the vehicle. Companies are
using sensor technology to serve as collision-avoidance systems that operate and control vehicle safety
systems and on-board equipment.
35
36
ARTICLE
orbes magazine has featured a list of the happiest people in the world
for 2013. According to the
magazine, Norway, Sweden, Australia, New Zealand, Canada, Finland, Netherland, Switzerland and
Ireland are the happiest countries
of the world. We want to review
auto industry conditions in the happiest countries. What kind of cars
do they run? Do their cars influence
their life dramatically? What is the
relation between happiness and
auto industry?
F
30 thousand sedans annually. Zenvo Automotive is the most famous
Danish car maker which uses big
EU automakers’ technology and
auto parts to manufacture a super
sport car. The carbon fiber body is
made in Germany and many components such as gauges, petrol
tank, ABS brakes, traction control,
and airbags come from US or German cars.
The three other auto firms professionally carry out sports cars tuning
for domestic races. This country is
also a Schengen state so there is
no prohibition for auto imports.
Happiest Country
The results of our findings showed
anything could make the people
of the happiest countries pleased
except cars and the auto industry.
Norway’s most important achievement in the field of auto industry is
only an electric car company which
is mostly directed by foreigners.
The company was long affiliated by
Ford Company but they sold it to a
Russian auto group and most of its
products are used in other countries. Norwegians used to founded
and directed seven auto manufacturing company which had been
active from 1950s until 2011. The
companies announced bankrupted
and were closed. The country is
a Schengen country and a member of World Trade Organization it
does not pay any tariff duties and
taxes for importing car from other
EU members. There are tight traffic
laws in the country and driver are
required to run their car by only 40
or 60 kilometers of speed.
A Happy Place for Cars
The automotive industry in Sweden is mainly associated with passenger car manufacturers Volvo
Cars and Saab Automobile but
Sweden is also home of two of the
largest truck manufacturers in the
world: Volvo AB and Scania AB.
The automotive industry is heavily dependent on export as some 85
percent of the passenger cars and
95 percent of the heavy vehicles
are sold outside of Sweden. The
automotive industry and its subcontractors is a major part of Swedish industry.
Most of Swedish auto companies
were closed during World War II
and did not revive. Volvo, Saab and
Koenigsegg are among famous
Swedish automotive groups whose
products are mostly being exported. Current active Swedish auto
companies mainly use hand-made
or American auto parts.
Land of Kangaroos
Free Territory of Cars
Scandinavian Denmark has begun to step in auto manufacturing
way since the World War II finished.
All of its 16 automakers are active domestically and locally. They
mainly manufacture hand-made,
sports and carting cars and their
total production stands at less than
Although Australia is a thriving
auto market, the country does not
own many automakers. Australia
is one of only a few countries with
the capabilities to design cars from
scratch and manufacture in significant volumes. Australian-designed
cars are made by local producers
Holden (a subsidiary of General
Motors) and Ford Australia. Toyota
Australia also manufactures local
variants of its international models,
particularly the Camry.
In Australia the cars are righthand-drive and should not exceed
the 60 km/h speed, if so the driving license of the driver would be
seized for three months. Car import
customs duty is not high in Australia
but the country enforces high taxes
for carbon production which raises
the price of a car by 2.5 folds.
A Good Consultant for Big
Automakers
The automotive industry in New
Zealand no longer has a vehicle assembly industry for passenger cars.
Changes to protection of the local
industry eventually led to the closure of the assembly plants since
they could not compete with foreign
counterparts.
Currently, there are a number
of small domestic companies producing original kit and replica cars
using local-made car bodies and
imported componentry for both the
local and international markets.
Several of these, while small in
size, are noted internationally for
the quality of their workmanship.
Most domestic vehicles are imported, with Toyota, Ford, and Holden
dominating the market.
The automotive industry started
with import of two Benz cars from
Paris by William McLean. Apart
from a few attempts to create locally made cars in the 1900s most
were imported. New Zealand Government legislation and import
duties in the early 1920s created
conditions which meant that major
international companies such as
Ford and General Motors started
assembling cars locally.
The country’s small domestic
companies have been successful
to give useful consults to big international automakers in the field of
engine design and aerodynamic
engineering.
37
ARTICLE
Almac and Beattie are the two
companies active at that country
and are famous for their workmanship. There are also several tuning companies that cooperate with
car racing teams contractually and
prepare cars for races. Britten Motorcycle Company is a domestic
motorcycle manufacturer in New
Zealand whose products is being
sold within Oceania continent.
Big Neighbor of US
Notwithstanding Canada enjoys
every facilities and resources required to become a house of automakers, it preferred to expand
its agriculture and other heavy industries. Before 1960s the country
embarked on auto manufacturing
task but all its efforts were not successful.
High consumer prices and production inefficiencies characterized the Canadian auto industry to
the signing of the 1965 Automotive
Products Trade Agreement with the
United States.
The 1965 Automotive Products
Trade Agreement or “Auto Pact”
represents the single most important factor in making the Canadian
automotive industry what it is today.
As to the pact managing and directing all parts of Canada automotive
industry was transferred to the US.
After signing the agreement all auto
firms like Ford, General Motors and
Chrysler started acting in the country with the suffix of Canada (for
example Ford Canada) and began
production and export.
Beside Orion Auto Inc, Nova Bus
and Arment are three originally
American firms active in Canada.
The companies of Toyota and
Hyundai have established independent branches in the country.
be well developed. But it is not so.
Since first days automotive industry landed in the country only nine
firms were active in Finland of
which just three have not yet announced bankruptcy.
Talbot was an automobile marque
that existed from 1903 to 1992, with
a hiatus from 1960 to 1978, under a
number of different owners, latterly
under Peugeot.
Elcat Electric Vehicles is another
Finnish company established in
1985 with the aim of developing a
commercial electric vehicle for urban delivery traffic. However, Elcat
Oy, the owner of Elcat Electric Vehicles, has been researching electric vehicles since the beginning of
1970’s. Two other Finland’s auto
firms produce hand-made auto
parts and tuning cars.
The Country of Tulips
The beautiful country of Tulips
and windmills is a geographically
low-lying country, with about 20%
of its area and 21% of its population
located below sea level and 50% of
its land lying less than one meter
above sea level. So there are not
many roads in the country. However the Netherland has put its effort
to become an automotive industry
owner. About 39 auto firms have
been functioning in the country of
which many were bankrupted.
Spyker Car is Netherland’s most
famous carmaker which produces
super sports cars. In addition to
Spyker Car six other auto firms like
Wijenburg, Barton, Leviatron, Carver…are keeping on their function in
the country.
DAF Co. was a famous Dutch
truck maker which was sold to
American PACCAR Inc. in the year
2012.
A Place for Formula One
The Country of Watches
Finland is the home of world’s
best Formula One drivers, therefore its automotive industry should
Switzerland is mostly famous
for its watches and also called the
country of industrialists, but it was
38
not so successful in the field of auto
industry. During Switzerland history,
51 auto firms have been functional
none of which were successful in
domestic and international market.
Orion was the first Swiss automaker established in 1900 and
closed in 1920s. There are three
more active auto firms in Switzerland. Sbarro was founded in 1967
and uses Mercedes-Benz engine
and Lotus parts to produce super
sport cars. From other functional
Swiss automakers we can point to
Rhine Speed and Leblang whose
production is similar to Sbarro.
Colonialism Defiant
Ireland has long been defiant to
old colonialist (UK) and now stands
at first ten happiest countries in the
world. The country set off on auto
manufacturing industry in 1907.
Aylesbury was the first Irish auto
maker established in 1907. But unfortunately Irish people did not welcome automotive industry and all of
its four car manufacturers became
bankrupted. Ireland production rate
was at best during 1950s which
reached hardly to 15 thousand cars
per annum. The country imports its
basic need of cars from its neighboring countries like Germany,
France and England.
INTERVIEW
The History of BMW in Iran
BMW is a popular brand for every
generation around the world and
in particular, Iran. After car imports
were liberalized in 2005, BMW reentered officially Iran car market
after being absent for a number of
years.
Iranians welcomed several models of BMW and the company benefitted from this market significantly.
Ali Nouriani is the importer of BMW
vehicles. His family and he were ac-
tive in the field of print industry. Now
he is one of the most prominent Iranian businessmen in Germany.
During an interview with Iran
Commerce he pointed to ten years
of efforts to license BMW imports
to Iran and start assembly of BMW
sedans and producing its parts.
However he was not successful and
tried to persuade Iran Police Forces
buy BMW sedans for their missions
and officials, but police preferred
Mercedes Benz. At last he set up a
BMW exhibition in Iran; it was while
foreign auto import was not free in
the country.
You can read the full excerpt below.
Would you please explain
about your father career?
When did your family begin
its business activities?
My father, Morteza Nouriani ini-
39
INTERVIEW
tiated modern printing industry in
Iran. Nouriani Institue was founded
in 1931 whose main business activity was importing print and …machines. Some of these machines are
still active after 50 years and some
others that we sold 50 or 40 thousand rials, no cost millions of rials.
Unfortunately imported machines
during recent years are not qualified
and do not have proper after sale
services.
As I know your father started cooperation with German Heidelberg in the early
years of 1950s, so he had
more tendencies toward
Germany. How do you describe it?
Heidelberg was one of the companies my late father cooperated
with. Many international printing and
lithographic companies had contract
with him but he continued working
with Heidelberg and broke with British Roland Co.
My late father mostly liked to
work with German and Swiss firms.
Among his partners, there were few
40
British and Italian companies whose
services and goods were not well
qualified to be offered in Iran. So we
preferred to disentangle ourselves
and continue with Swiss and British
firms.
More than 15 thousand BMW
sedans were imported to Iran from
2005 of which 60 percent was imported by Nouriani and Persia
Khodro.
Why Iranian traders were
more interested in working
with German companies
during those years?
Because Germans offer more
qualified goods and services and
have better cooperation with Iranians, so Iranian traders who enjoy
very little backup can attain huge
achievements with collaboration of
Germans.
Germans constructed many powerful and valuable buildings which
are still fashionable and strong. Iran
Foreign Ministry and Defense Ministry buildings and construction in
Sakhaei Street are good examples
of German works in Iran. The said
buildings were guaranteed by their
constructors until 10 or 15 years
ago. They had been sending their
experts to Iran for many years to
check the said buildings and remove
any existing problem. This shows
their high obligation and respect for
their customers.
Did you import BMW sedans before the Revolution?
Our closeness with BMW Company refers to many years ago. I
remember although my father did
not have any relations with the company, he drove a BMW sedan when
I was a child.
My brother and I liked working
in the field of motorcycles so we
signed some contracts with several
motorcycle manufacturers and began a side business in this field.
One of them was BMW with which
we signed a contract in 1975 and
started importing its motorcycles.
Now in Iran if a trader wants to
import a motorcycle brand he is
obliged to import cars too. This is
not acceptable because they are
both from one brand but their managing and selecting system is differ-
INTERVIEW
ent. At that time we had the license
of BMW motorcycles and Mr. Vahhabzadeh BMW car dealership.
I also founded the first motor racing track. Before the Revolution people brought their maico and cross
motorcycles to the streets which
bothered the public. We established
a motor racing track and hired a Belgian coach and were successful to
collect the earsplitting motorcycles
from streets.
When did you take measures to become the first
BMW dealership in Iran?
Before any businessman who
imported BMW sedans or motorcycles said he was a full dealership of
this famous and popular brand. But
when I called one of my friends in
Germany in 1989 he said there were
no BMW full dealerships in Iran and
I declared my tendency toward negotiations to take the permission of
selling all products of BMW brand in
Iran.
Then we started bilateral talks in
1990 for this purpose which continued for 10 years. Although BMW
representatives knew us and our
company very well it was not easy
to take the official dealership from
them. At that time UAE was the closest Iran trade partner where two official dealership of BMW brand were
active, but we had no in Iran.
No wise businessman wastes his
time for 10 years to take a brand’s
dealership, but I persisted and was
successful to sign a contract with
the company in the year 2000.
During those 10 years I set up
several BMW car exhibitions and
showcased state-of-the-art technologies of luxury and concept BMW
products in international car exhibition.
The people admired our task a
lot because though there were no
official dealership and import, we
displayed BMW products. In fact we
took cutting-edge BMW products
out of the pages of magazines and
books.
Sometimes there were some set
backs during the fair too, for instance they took in the sedan and
damaged some parts, tore the seat
belts …but we did not care and continued our job.
BMW Company itself well-liked
the fair too. It was interesting for
them that while we did not take the
official dealership at that time we
disbursed a high expenditure to
show their products.
It was also interesting for BMW
managers that Iranian people had
considerable information about
BMW products; it was while BMW
brand was not up to date in Iran at
that time.
Do you still hold the cars
you showed during that exhibition?
No we did not. At that time we
could hold those sedans after paying their customs duties. But I disagreed because many people could
not buy such cars. We spent a lot of
money to return the mentioned cars
and sold them with lower prices.
I believed that the cars should be
imported to Iran when many people
could afford for them.
Did you try to set up BMW
assembly lines in Iran?
Between 2000 and 2004 there
were no BMW imports and we tried
to set up BMW assembly line in the
41
INTERVIEW
country. To do so I invited German
BMW part manufacturers to Iran to
get familiar with Iranian auto part
makers and train them their modern
technology.
In between, we found some Iranian qualified firms which could
become BMW spare part manufacturers. If a company in a country
is able to make a standard part for
BMW, the part will be used not only
in that country itself, but also all over
the world. I hoped that our auto part
makers could manufacture BMW
parts for being used in every country
and that auto part maker would not
be under the pressure of domestic
companies.
It is to be said that if domestic
companies force the part manufacturer to make cheap spare parts
with low quality, the manufacturer
cannot complain. But when it offers
an international product it can reject
producing poor standard goods and
guarantee quality and security of the
car. Unfortunately I could not take
any positive steps in this regard.
Would you please elaborate on Iran police force’s
big purchase? It seems
that it was a good opportunity for BMW to be the official police car instead of
Mercedes-Benz?
Iran Police was intended to buy 4
thousand sedans of foreign brands.
In between BMW and MercedesBenz competed closely. We talked
to the German side a lot, but they
insisted on setting up our after sale
services in six global centers before
founding domestic assembly lines. It
was impossible for us.
I told BMW officials that if they
sold 4 thousand sedans to Iran Police Forces we could set up police
car after sale services in provinces,
beside we could remove the barriers to establish same services for
personal cars. If so, we were able to
found the assembly line in Iran.
Why the Police did not decide on BMW instead of
Mercedes-Benz?
Well, there existed many prob-
42
lems. They annoyed me too because I spent a lot of time and they
did not respect it. They could only
inform me that they had chosen
Mercedes-Benz, but I heard it from
the German side.
When did you return to the
market and restarted BMW
talks?
During the year 2004 the government announced that foreign car
brands could be imported under
special regulations. We had created an expert team to follow technical talks. We had also determined
places for after sale services for embassy cars and cars with temporary
movement permit.
So when car imports to Iran were
liberalized we could win the first
approval for importing foreign car
brands. After us Mercedes-Benz,
Toyota …could take the permit.
Did you start cooperation
with Persia Khodro at the
same time?
No, Persia Khodro was not established at that time. Rey Investment
Co. from Rey city, Tehran Province,
offered us to cooperate and collect
money for charity purposes and
school and hospital construction. I
accepted because I liked to be helpful for development of the city which
has been holy for Iranians for hundreds of years.
BMW is the car Iranians
adore and view as a sign of
wealth. You said you are interested in charity and public welfare activities. If so
why did you try to import
such luxury cars which the
public cannot afford to buy
them?
BMW is an expensive brand so
that in Germany itself not everyone
can buy its products. I chose this
brand to do a positive work for my
people. I wanted to prove that in Iran
we are able to import and use such
brands too and create competitiveness between domestic companies
and foreign brands. After we began
to import BMW products, domestic
companies tried to optimize their
products and after sale services and
so the market turned to a competitive one.
When there were no car imports,
domestic companies were not interested in improving their products.
In fact the best sedan Iran Khodro
produced at that time was Paykan
which was just offered by the white
color.
After car imports were loosed and
foreign brands entered Iran domestic companies lagged behind. So
they launched leasing companies,
developed their styles…
When we were struggling to win
BMW import permit, I helped Mercedes-Benz take the license sooner. Its officials were shocked and
thought I wanted to their job. I told
them that I did it to make the market competitive. When two famous
brands exist in a country, competitiveness will expand and customers
have more options to choose.
Do you buy BMW products
from its main factory or
from regional markets?
From the first days of our work we
bought BMW products from Munich
factory. I believe that BMW products
manufactured for Persian Gulf Arab
states have different standards. For
the weather condition there is totally
different from ours. For instance the
do not need powerful heating system, but in Iran winters we experience very cold days. So we order
the cars ourselves.
BMW does not produce stark autos. There is always a sign in conductor part of the BMW sedan which
shows the company and country
that ordered the car. So the company manufactures each car for a special country with its distinguished
standards.
Some BMW sedans have
been imported to Iran by
other importers than Nouriani Institute or Persia
Khodro. What is your idea
about it?
We call it grey import which occurs
in every country. Though there are
INTERVIEW
two official dealership of a brand, a
businessman imports a car for example from France with import tariff
of more than four percents.
I believe that they are also good
cars but with no management and
arrangement. Such sedans have no
proper guarantee and distinguished
standards. If the engine hurts and
its owner refer to us for repair, it
should have guarantee; otherwise,
he should pay a lot of money for it.
We as official dealership of BMW
are obliged to offer broad after sale
services. Before about 50 percent
of BMW imports were grey imports,
Mercedes-Benz too suffered from
more than 90 percent of grey imports but now there are more controls.
International sanctions affected different industrial
sectors and their managers
generated some initiative
to take on the sanctions.
What did you do? Did sanctions influence your business too?
Of course the sanctions affected
our business. They affected the
job of all foreign cars dealer ships
even Korean and Mercedes-Benz.
However we have faced it with a
high flexibility. We are obliged to
undertake out commitments to our
customers. We cannot tell them that
for EU sanctions we would cut our
services to them.
How is the condition for
your old rival MercedesBenz?
After Germans left and a new
team took the control of its dealership, I do not have strong relations
with them compares to the past. But
as I know they are confronting more
challenges than us; because the
United States has put more pressure on Mercedes-Benz than BMW.
The US imports much more Mercedes-Benz products compared
to Iran and if it cuts its imports the
company will be bankrupted. It is to
say that if Iran imports one thousand
sedans, the US imports 600 thousand whose difference is significant.
Germans think economical and try
to avoid irreparable losses.
The BMW X6 is a mid-size
luxury crossover of which
exist a few in Iran. It seems
that only disabled veterans
have import permits for this
car. How can they import
this X class BMW sedan?
This model of BMW car is being
produced in East US in a BMW plant
located there. Because it is manufactured in the US it is counted as
an American product. We are suffering tight US sanction so we cannot import the car. BMW X5 and X3
are counted as American products.
Only BMW X1 and Z4 are going to
be manufactured in EU and we are
planning to buy them.
Disabled veterans imported a few
BMW X6 sedans under special exemptions which are available only
for them. They also import these
cars from regional markets like Persian Gulf Arab states.
ports was speculative and
decreased
employment
rate. What was your motivation to win BMW import approval? There were
many people before and after the Revolution who did
profitable businesses and
departed their capitals to
make more money. Many
other capital holders prefer
to start a profitable business within the country
rather than spending their
liquidity to create employment or develop domestic
production. Why didn’t you
begin such businesses?
It is the right of all Iranians to enjoy
the best products and brands. When
a child is walking in the street along
with his father, he sees a passing
BMW sedan and asks his father
what is this? His father explains to
him that this is a BMW brand luxury
car which is expensive and comfortable. Simultaneously the child starts
planning to buy one of those cars.
I mean that when you look upward
you try to lift up yourself and improve your conditions.
Many people have been employed
in our institute and enterprise in Iran
and other countries, after sale service centers and in the market. So
our business not only benefits Iranians but also improves their culture
and expectations.
Experts criticize that the
purpose behind car im-
43
Different Types of Car
Engines
here are a number of
different types of car
engines in today’s road
and race cars, and the
number is growing especially with
emerging technologies like Hybrids.
Most cars these days use what is
called a four-stroke combustion cycle to convert gasoline into kinetic
motion. This four-stroke approach
is known as the the Otto cycle, in
honor of Nikolaus Otto who invented it in 1867.
• Intake stroke- air and fuel are
taken into the cylinder as the piston
moves downwards.
T
44
• Compression stroke- where the
air and fuel are compressed by the
upstroke of the cylinder.
• Combustion stroke- compressed
mixture is ignited and the expansion
forces the cylinder downwards.
• Exhaust stroke- waste gases
are forced out of the cylinder.
The intake and outlet ports open
and close to allow air to be drawn
into the cylinder and exhaust gases
to be expelled.
So we understand that the engine is effectively a device which
sucks in air, compresses it, ignites
it and then blows the air out again
to create power to the road wheels.
In terms of the performance gains
possible, there are a vast multitude
of different techniques and technologies.
First of all lets get a understanding of the different types of engine
layouts commonly found in cars
today. As Engines can come in an
array of different designs, including
Straight/Inline, V Type, Boxer, Rotary Wankel and even Diesel:
Straight/ Inline Engines
In-line engines have the cylinders
arranged, one after the other, in a
straight line. Almost all four cylinder
engines are A straight/Inline engine
is considerably easier to build than
an otherwise equivalent Boxer or V
type engines because the cylinder
bank and crankshaft can be milled
from a single metal casting and it
requires fewer cylinder heads and
camshafts.
This ultimately means lower production and maintenance costs.
Also due to their smaller and more
lightweight construction, this is the
preferred Engine design for FF cars
(Front Wheel Drive). The design
can be extremely fuel efficient com-
pared to V type, Boxer and Rotary
engine designs.
There are some five and six cylinder Straight/ Inline design engines,
which are mainly found in European cars from the likes of Audi and
BMW for example.
Reasonable performance can be
achieved with performance levels
in the 0’9 Ford Focus RS around
300 BHP. This is mostly due to
Turbo Charging and boost pressure
used, but it is common for a 2.0 Litre 16 Value inline 4 to produce 200
BHP plus.
The engines are not generally
thought to be as smooth as the V
type and Boxer engine designs and
the structure has it’s limitations in
terms of durability and strength.
Inline engines can sometimes be a
little rough in lower revs, but work
well for smaller cars and do respond well to Tuning.
V Type Engines
The V-type of engine has two
rows of cylinders set normally at
a ninety degree angle to each other. Advantages include it’s short
length, great rigidity of the block,
its heavy crankshaft, and attrac-
45
ARTICLE
tive low profile. This is a tried and
tested engine design with huge performance potential.
In sports applications, having the
engine as low to the floor as possible increases the car’s handling
characteristics, as it will naturally
have a lower centre of gravity. Also
having a strong engine with built
in rigidity can mean the difference
in endurance races, making the V
type engine design an ideal choice
for Motorsport applications.
With this type of engine it is possible to have a very high compression ratios, without block distortion
under load.
This makes it a strong and robust design for high performance
applications and is used in F1 for
instance. Also with it’s resistance to
torsional vibration, the engine characteristics produce a smooth and
refined engine.
Another attribute for this compact engine design is a shorter car
length without losing passenger
room. In 1914, Cadillac was the
first company in the United States
to use a V-8 engine in its cars. From
there America has fallen in love
with the V type engine and the 50’s
and 60’s produced some of the best
Muscle cars.
Boxer/ Flat Engines
In 1896, Karl Benz invented the
first internal combustion engine with
it’s horizontally opposed pistons.
This Boxer/Flat engine is an design
with multiple pistons that all move
in the horizontal plane. The most
popular and significant layout has
cylinders arranged in two banks on
either side of a single crankshaft,
generally known as “boxers”. This
is because the two pistons join together in the middle of TDC ( Top
Dead Centre).
This is similar to two boxers
touching gloves at the beginning
of a bout and is the origins of the
name appointed to the engine design.
Flat engines have a lower center
of gravity than any other common
configuration, so vehicles using
them should benefit from better sta-
46
bility and control during cornering.
But they are also wider than more
traditional configurations and the
extra width causes problems fitting
the engine into the engine bay of
a front-engined car. Subaru have
been producing AWD front engined
cars for some time now, so where
there’s a will they is a way.
Boxer engines are one of only
three cylinder layouts that have a
natural dynamic balance; the others
being the Straight/Inline 6 cylinder
and the V12 design. This makes for
a smooth and harmonious engine
at idle.
Boxer/Flat engines tend to be
nosier then other designs due to the
lack of airboxes and other components in the engine bay. They have
a engine characteristic of smoothness throughout the rev range and
when combined with a mounting
position immediately ahead of the
rear axle, offer a low center of gravity and largely neutral handling
characteristics.
Wankel/ Rotary Engines
The Rotary Wankel engine was
an early type of internal-combustion engine in which the crankshaft
remained stationary and the entire
cylinder block rotated around it.
The Rotary/ Wankel engine has
no pistons, it uses rotors instead.
This engine is small, compact and
has a curved, oblong inner shape.
Its central rotor turns in one direction only, but it produces all four
OTTO strokes (intake, compression, power and exhaust) effectively.
The only production car to still
have a Rotary/ Wankel engine
design in production today is the
Masda RX-8 and previous RX-7
models.
The Rotary/ Wankel engine is
limited by its inherent restriction on
breathing capacity due to the need
for the fuel/air mixture to be aspirated through the hollow crankshaft
and crankcase, which directly affected its volumetric efficiency, also
low torque levels are a known problem and the engine has design limitations. Turbocharging this engine
is one of the easiest ways around
these deficiencies and was seen in
the RX-7.
The rotational forces of the mass
of the Rotary/ Wankel engine’s
weight produce a powerful gyroscopic flywheel effect. This smooths
out the power delivery and reduces
ARTICLE
vibration. Vibration had been such
a serious problem on conventional
piston engines that heavy flywheels
had to be added to the overall engine design to help counteract the
effects.
The cylinders themselves functioned as a flywheel, Rotary engines gained a substantial powerto-weight ratio advantage over
more conventional engines. Another advantage was improved cooling, as the rotating cylinder block
created its own fast-moving airflow,
even at standstill.
Dispensing with separate cylinders, pistons, valves and crankshaft, the rotary engine applies
power directly to the transmission.
It’s construction allows it to provide
the power of a conventional engine
that is twice its size and weight and
that has twice as many parts.
The Rotary/ Wankel burns as
much as 20% more fuel than the
conventional engine and is potentially a higher polluter, but its small
size allows the addition of emission-control parts more conveniently than does the piston engine.
The basic unit of the rotary engine is a large combustion chamber
in the form of a pinched oval. Within
this chamber all four functions of a
piston take place simultaneously in
the three pockets that are formed
between the rotor and the chamber
wall. Just as the addition of cylinders increases the horsepower of
a piston-powered engine, so the
addition of combustion chambers
increases the power of a rotary
engine. Larger cars may eventually use rotaries with three or four
rotors.
Mazda have had numerous success with this design, especially
with the RX-7 and RX-8 models.
By adding a turbocharger as discussed previously, the torque deficiencies are some what over come
and also engine power greatly increased. This combined with the
lower weight made a effective and
competitive performance package.
vented by Rudolf Diesel, of German
ethnicity born in Paris. Although
quite similar in design to petrol internal combustion engines, Diesel
engines use compression to ignite
the compressed fuel to air mixture
prior to injecting it into the combustion chamber, with out the need for
spark plugs.
Advantages over Petrol Engines:
• 45% efficiency in converting fuel
into mechanical energy compared
to Petrol at 30%.
• Engine life expectancy is twice
as long compared to petrol engines,
due to the stronger internal design
to cope with higher pressures under combustion.
• No need for HT leads, spark
plugs and coils, meaning greater
reliability especially in damp environments.
• Diesel engines are immune to
vapour lock and the fuel is not explosive like petrol.
• No proportionate decrease in
fuel efficiency compared to petrol
engines, at higher engine loads.
• Produce less heat in cooling
and exhaust.
• Produce less carbon monoxide
and can be used in underground
applications.
• Can accept turbo/supercharging
with out risk of detonation, unlike
petrol engines at higher pressure
levels.
• Higher torque lower in the rev
range.
• Diesel fuel is denser then petrol and contains roughly 15% more
energy.
Disadvantages
Engines:
over
Petrol
• Lower power to weight ratio then
petrol engines, due to the increased
internal component strength.
• Lower power and rev band
range compared to petrol engines,
although turbo/ super charging has
helped to combat this in the last
decade.
• Normally noisier and rougher
in operation compared to petrol
counter parts, although diesels are
almost on par with technological
advancements.
• More expensive to purchase
and run compared to petrol alternatives, due to increase in stronger
components and more regular service schedules.
Diesel Engines
The Diesel engine was first in-
IRAN CHAMBER OF COMMERCE, INDUSTRIES, MINES & AGRICULTURE
URE - QUARTERLY MAGAZINE
47
REPORT
The Market Share of Domestic
and Foreign Auto Firms in Iran
ran roads are occupied with different classes
and brands of domestic and foreign cars. In between Saipa and Iran Khodro, two major Iranian
auto manufacturers, have the most portions in
domestic auto market.
Iran Standard and Quality Inspection Company (ISQI)
reviewed the share of 15 auto provider companies from
Iran car market during second half of last Iranian year
(ended March 20). According to the latest quality report
of ISOI Saipa ranked first and Germans last among the
mentioned 15 firms. As per the ranking, Chinese companies hold a share of one percent and Koreans 1.4
percent from Iran auto market.
I
Market in Hands of Domestic Firms
Domestic firms have cornered Iran auto market;
though it is a positive point that domestic auto companies have been raising employment rate and decrease
dependency to foreigners, there is also a negative
48
sense. That is Iranians cannot afford to buy foreign
cars and are not well familiar with major foreign brands.
According to latest statistics Saipa have dominated the
market with a 46.9 percent share with reducing the
negative scores of X131 car (Pride) and improving its
quality.
The sedan is the most popular product of Saipa for its
better quality and cheaper price, so that it constitutes
nearly 95 percent of Saipa production. Before the car
was among low quality sedans and offered in different
classes and prices.
Rio and Xantia are two other sedans produced by
Saipa. The two cars too could help improve the ranking
of Saipa; though Xantia is not being produced anymore
and Rio manufactures in low numbers. Tiba is a new
product of Saipa and is going to be the top product of
the company.
Iran Khodro Industrial Group (IKCO), the largest Middle East car manufacturer, makes up 46 percent of
REPORT
whole market share and ranked second after Saipa.
Although the company offers various products like
Peugeot 405, Samand, Peugeot 206 and Peugeot
Pars which are highly popular among Iranians, Saipa’s
pride sedan is still the most admired by people.
IKSO is going to introduce new products like Rana
and Dena which could be helpful to upgrade the place
of the company.
After IKCO, Saipa subsidiary Pars Khodro could
grasp the seat place among active car manufacturers
in Iran. Offering cars such as Maxima, Megan, Tondar-90 and Qashqai, Pars Khodro comprise 3.8 percent
of Iran auto market share. The company’s products are
counted along with luxury and expensive cars in Iran
market and not many people can afford to buy its products.
“Sanabad Khodro Toos” is another Iranian auto maker which manufactures Chery’s A15 sedan in Khorasan
Privince. This is while it sounds as if currently the company does not produce any of Chery sedans.
Later Modiran Pars Co. was assigned to launch the
Chinese Lifan vehicle in Iran which could only comprise 0.1 percent of Iran market share.
Bam Khodro is another auto company which produces Chinese Lobo. The company makes up for 0.1 percent of market proportion. Experts believe that the 0.1
percent share of Bam Khodro from Iran auto market is
due to production of Volkswagon Gol vehicle.
Low fuel consumption and cheap price are two major
properties of Chinese cars which made them popular
among people; this is while their quality is mostly at
low level.
High Proportion of Koreans
The proportion of Korean cars to other foreign sedans is higher. Koreans make up for 1.4 percent of Iran
market share which shows Iranians have welcomed
Korean companies like Hyundai and Kia. In the situation that Koreans had announced they would withdraw
from Iran market, their official dealerships (Asan Motor,
Rain Khodro, Atlas Khodro) could constitute the largest proportion of Iran marketplace compared to other
foreign companies. Hyundai Santa Fe, Sonata, Avante,
Kia Sorento, Cerato and Sportage are the most in style
Korean cars in Iran.
In other words, Hyundai and Kia products which are
imported to the country constitute one percent of market share and those manufactured by domestic producers like Rain Khodro (Verna, Avante) make up for
0.4 percent of Iran market share.
Japanese Lagged Behind
Japanese auto makers used to have active presence
in Iran auto market, but now they stand after Koreans
and Chinese firms as the third foreign automakers
in Iran. Two reasons caused dim company of Japanese auto firms in Iran market: international sanctions
against the Islamic Republic which forced Japanese
firms limit their business in Iran and fast movement of
Korean firms to overtake other foreign firms in Iran’s
profitable market.
As per ISQI statistics, Bahman Industrial Group as
the producer of “Mazda 3” sedans comprise only 0.5
percent of Iran market share and Irtoya 0.1 percent by
producing Orion vehicles.
Distasteful Presence of Chinese Companies
If Koreans decide to leave profitable Iran auto market, Chinese companies will actually replace them.
“Sanabad Khodro Toos”, “Modiran Khodro”, “Bam
Khodro” and “Modiran Pars”, are official importers and
manufacturers of Chinese cars.
Chinese companies are extremely interested in being present in Iran auto market and are featuring in
three several companies whose productions are low.
In between Chery Company has a vast plan to expand
its presence in Iran.
The company which is among top five Chinese auto
makers offers MVM sedans via Modiran Khodro Company and constitutes 0.6 percent of market share.
Chery was planned to spread out its attendance in
Iran, but for marginal problems the plan was cancelled
and the company has limited its presence to the private
sector.
Rare Germans
Cryptic and slow move of German car brands shows
that Iranians will soon forget luxury cars like MercedesBenz and BMW.
Germans have long been actively present at Iran car
market, but their share decreased to less than 0.2 percent. Persia Khodro is the official dealership of BMW
products and Setareh Iran Co. the official importer of
Mercedes-Benz sedans and each of their shares from
Iran auto market stands at less than 0.1 percent.
Earlier the two well-known German companies
warned that they would limit their business with Iran
and may withdraw from the country’s auto market. This
is while their products are not only of high quality but
also are too expensive; so that not all people can afford
to buy them.
Futile MG
The Chinese-British Media Qeshm auto maker has
introduced MG Rover sedan to Iran car market whose
market share is less than 0.1 percent in Iran.
49
REPORT
The Growing Presence
of Asian Vehicle
Manufacturers in Iran
50
REPORT
astern countries’ share of Iran auto market
is high; so that many Iranian customers
are only keen on buying Japanese brand
cars.
As Japanese auto firms have become admired in
Iran we preferred to review the background of their
activity and presence in their hometown and Iran in
order to get a better sight about these companies
and their products.
E
Mazda
The company website states that name “derives
from Ahura Mazda, the Iranian Zoroastrian God.
The company website also notes that the name
“also derives from the name of our founder, Jujiro
Matsuda.” The company is known as “Matsuda” in
Japan. According to Mazda website, “the company’s name, “Mazda,” derives from Ahura Mazda, a
god of the earliest civilizations in western Asia. We
have interpreted Ahura Mazda, the god of wisdom,
intelligence and harmony, as a symbol of the origin
of both Eastern and Western civilizations, and also
as a symbol of automotive culture. It incorporates a
desire to achieve world peace and the development
of the automobile manufacturing industry.”
Mazda began as the Toyo Cork Kogyo Co., Ltd,
founded in Japan in 1920. Toyo Cork Kogyo renamed itself to Toyo Kogyo Co., Ltd. in 1927. Toyo
Kogyo moved from manufacturing machine tools to
vehicles with the introduction of the Mazda-Go in
1931. Toyo Kogyo produced weapons for the Japanese military throughout the Second World War,
most notably the series 30 through 35 Type 99 rifle.
The company formally adopted the Mazda name in
1984, though every automobile sold from the beginning bore that name. The Mazda R360 was introduced in 1960, followed by the Mazda engines in
1962.
Mazda entered Iran in 1970s sending family cars
and pickups to the country. At that time the Mazda
929 was extremely welcomed in Iran. The car was
originally a mid-size car from 1973 to 1987 and as
a full-size car thereafter. Marketed over three decades, the 929 was originally the export name for the
Mazda Luce. Also Mazda pickups have been used
on Iran roads since that time.
As of 1959 “Bahman Automotive Group” started
the assembly of Mazda three-wheel pickup with
the cargo capacity of 200 Kg upon obtaining the
production license from the ministry of mines and
industries. Later in 1971 the company increased its
range of products to include various Mazda pickups
such as1000 cc Mazda pick-up with the cargo capacity of 500Kg.
In the same year the company also changed
name to Mazda automobile production Co. Later
in 1984, 1600 cc Mazda pickup was launched and
the company again changed name to “Iran Vanent
(pickup) Co”.
In the year 1986-1987 it launched 1800cc Mazda
pick-up and upon the privatization of the company
in late 1993 its field of activities was considerably
developed to include various activities and products like different types of Mazda pickup and Mazda
323 passenger car.
In 2007 in line with the strategy to expand its
products and also to keep along with the modern
technology of the world, Bahman Group launched
Mazda 3 passenger car and in the same year with
the goal of diversity its products the function assigning company for designing different functions
for ISUZU trucks was founded.
The brand symbol expresses Mazda’s dedication
to continuous growth and improvement. It is a symbolic development of the Mazda “M”, and shows the
company stretching its wings as it soars into the
future.
Toyota
Toyota has been always identified as initiator of
Japan automotive industry. The giant auto firm has
developed so that it took over American giants like
General Motors.
Toyota was started in 1933 as a division of Toyoda
Automatic Loom Works devoted to the production
of automobiles under the direction of the founder’s
son, Kiichiro Toyoda. Its first vehicles were the A1
passenger car and the G1 in 1935. The Toyota Motor Co. was established as an independent company in 1937.
The three ovals in the new logo combine to form
the letter “T”, which stands for Toyota. The overlapping of the two perpendicular ovals inside the larger
oval represent the mutually beneficial relationship
and trust between the customer and the company,
while the larger oval surrounding both of these inner
ovals represents the “global expansion of Toyota’s
technology and unlimited potential for the future.”
In 1957, when Toyota first came to America, GM
and Ford were kings of US automotive industry.
After a poor start with a car called the “Toyopet,”
Toyota came back strong in 1965 with the popular
90-horsepower Corona sedan. The sedan was a
start for Toyota in order to introduce its high technology products to the world and become a trustable brand. Two years after Corona was unveiled,
the total annual sale of Toyota reached 30 thousand
sedans and the amount has had an increasing rate.
During 1970s, Toyota was still moving fast forward
and penetrated American markets; in order that its
production rate reached 311 thousand annually.
As Toyota celebrated its 25th anniversary in
America during 1982, it opened a new national
sales headquarters complex that it occupies today
in Torrance, California. Toyota’s success continued,
and in 1986, it became the first import automaker to
51
REPORT
sell more than one million vehicles in America in a
single year, racking up sales of 1,025,305 cars and
trucks. That year also marked the company’s debut as a manufacturer in the United States, with the
rollout of the first Toyota car built on American soil.
Today, Toyota is one of the top-selling brands in
America and is committed to continuous improvement in everything it does, along with breakthrough
products for the future.
Lexus
In 1983, Toyota chairman summoned a secret
meeting of company executives, to whom he posed
the question, “Can we create a luxury vehicle to
challenge the world’s best?” This question prompted Toyota to embark on a top-secret project, codenamed F1 (“Flagship One”).
In 1989, Toyota branched out by establishing a
luxury line of vehicles with the debut of the Lexus
LS 400 and the ES 250. Highly acclaimed cars,
plus exceptional customer service quickly became
the hallmark of Lexus.
Despite being an upstart, Lexus established instant customer loyalty and its debut was generally
regarded as a major shock to the pedigree luxury
marques. BMW’s and Mercedes-Benz’s US sales
figures dropped 29% and 19%, respectively, with
BMW executives accusing Lexus of dumping in that
market, while 35% of Lexus buyers traded in a Lincoln or Cadillac to make their purchase.
In December 1989, Lexus initiated a voluntary recall of all 8,000 LS 400s sold to date, based upon
two customer complaints over defective wiring and
an overheated brake light.
In a sweeping 20-day operation which replaced
the parts on all affected vehicles, Lexus sent technicians to pick up, repair, and return cars to customers free of charge, and also flew in personnel
and rented garage space for owners in remote locations. This response was lauded in media publications and helped establish the marque’s early
reputation for customer service.
By 1989’s end, 16,392 LS 400 and ES 250 sedans had been sold in the four months following the
US launch. Although sales had begun at a slower
pace than expected, the final tally matched the division’s target of 16,000 units for that year. Following initial models, plans called for the addition of a
sports coupe along with a redesigned ES sedan.
Subaru
FHI started out as “The Aircraft Research Laboratory” in 1917 headed by Chikuhei Nakajima.
In 1932, the company was reorganized as Nakajima Aircraft Company Ltd. and soon became the
primary manufacturer of aircraft for Japan during
World War II. At the end of the Second World War
Nakajima Aircraft was again reorganized, this time
52
as Fuji Sangyo Co, Ltd. In 1946, the company created the Fuji Rabbit motor scooter with spare aircraft parts from the war. In 1950, Fuji Sangyo was
divided into 12 smaller corporations according to
the Japanese Government’s 1950 Corporate Credit
Rearrangement Act, anti-zaibatsu legislation, but
between 1953 and 1955, four of these corporations and a newly formed corporation Fuji Kogyo, a
scooter manufacturer; coachbuilders Fuji Jidosha;
engine manufacturers Omiya Fuji Kogyo; chassis
builders Utsunomiya Sharyo and the Tokyo Fuji
Dangyo trading company[citation needed] decided
to merge to form the Fuji Heavy Industries known
today.
The first Subaru car was named the Subaru
1500 introduced in 1955. Nissan had acquired a
20% stake in 1968 during a period of governmentordered merging of the Japanese auto industry in
order to improve competitiveness.
The company is famous for offering modern and
luxury cars with cutting-edge technology. Since the
2005 model year, Subaru has adopted the Controller–area network (CAN) bus technology for the
USA and Canada markets. It also uses aluminum in
its engines and other car parts and is committed to
all environment standards.
Subaru is the Japanese name for the Pleiades
star cluster (M45, or “The Seven Sisters”), which
in turn inspires the Subaru logo and alludes to the
companies that merged to create FHI.
Mitsubishi
The Mitsubishi Company was first established
as a shipping firm by Yataro Iwasaki in 1870. The
company was diversified into shipbuilding, banking,
insurance, warehousing, and trade. Later diversification carried the organization into such sectors
as paper, steel, glass, electrical equipment, aircraft,
oil, and real estate. As Mitsubishi built a broadly
based conglomerate, it played a central role in the
modernization of Japanese industry.
After the Second World War the company was
dissolved and divided to independent firms, the
structure has been kept by Mitsubishi officials until today. Entering China market the company was
the first Japanese firm began to act beyond Japan
boundaries.
During beginning years of 1880s, Japanese policy makers made a decision which slowed down
Mitsubishi growth. They decided to allocate a sate
budget to set up a new auto firm which was a strong
rival for Mitsubishi. As a result of that fake competition, the both companies went bankrupt.
Yet Mitsubishi went on with innovation and starting various activities. It bought a copper mine in
Okayama and a coal mine and the shipbuilding
area in Nagasaki from the government.
Yanosuke Iwasaki took over leadership of Mit-
REPORT
subishi on the death of his elder brother, Yataro.
The second Mitsubishi president was the architect
of diversification who set the group on the path it
follows today.
Yanosuke Iwasaki became president of Mitsubishi in 1885. The company was in the midst of bitter
competition with a rival shipping company. Yanosuke accepted government mediation, transferring
Mitsubishi’s shipping business to the new Nippon
Yusen.
Loss of Mitsubishi’s shipping operations motivated further diversification. Yanosuke shifted from a
sea- to land-based operation. He formed Mitsubishi
Sha, or Mitsubishi Company, in 1886. It centered
its business around the mining and shipbuilding operations that Yataro started.
Yanosuke’s Mitsubishi put a lot of effort into the
mining business. It purchased coal and metal mines
and invested in modernizing equipment and mining
techniques. The Nagasaki shipyard, which Yataro
had leased from the government, also became Mitsubishi property in 1887.
Hisaya Iwasaki ran Mitsubishi for 22 years. The
third Iwasaki president put the company on the path
of modernization in both technology and corporate
culture. He was the son of the company’s founder,
Yataro Iwasaki.
Koyata Iwasaki was the fourth and last president
of a unified Mitsubishi. He took Mitsubishi public and turned the company into a giant corporate
group centered on heavy and chemical industries.
Koyata also articulated the business principles that
continue to guide Mitsubishi companies today.
Koyata coped with Mitsubishi’s growing size and
diversity by spinning off business divisions as separate companies. The mining, shipbuilding, banking,
trading, and real estate divisions became joint-stock
companies under the umbrella of the holding company. Management autonomy gave those divisions
greater latitude for growth and development than
would have been possible in the old organization.
The rapid industrial development that took place
in Japan while Europe was engulfed in World War
I centered on and heavy and chemical industries.
Mitsubishi fostered ventures in electrical machinery, aircraft, oil refining, chemicals, and steel making, among others.
Mitsubishi also was active in international business. Koyata believed strongly in learning from
other nations. Under his leadership, Mitsubishi assimilated technology, financial expertise, and management know-how from the world’s best companies. He made alliances with companies worldwide,
including joint ventures for securing world-class
technology. Mitsubishi engineers improved on the
imported technologies and also began to achieve
original breakthroughs. Excellence in technology
became a distinguishing strength for Mitsubishi.
The end of the Second World War brought to a
close the Iwasaki chapter in Mitsubishi history. The
Allied occupation forces demanded the breakup
of Mitsubishi and other large family-controlled corporate groups. Mitsubishi headquarters closed in
1946, 70-some years after the organization began.
Koyata’s health deteriorated under the occupation,
and he died at 66 in December 1945.
After signing San Francisco Peace Treaty in 1952,
Japan was back to international community. A trend
toward consolidation sparked a wave of mergers
among the new ventures, and in 1952, three core
companies emerged: Fuji Shoji, Tokyo Boeki and
Tozai Koeki. Meanwhile, Kowa Jitsugyo adopted
the name Mitsubishi Shoji Kaisha (MSK). After this,
negotiations regarding a four-company merger rapidly gained momentum.
The merger faced various obstacles, but with encouragement from elders of the old Mitsubishi organization, the four companies eventually reached
an agreement and the new Mitsubishi Shoji was
launched in 1954.
Nissan
Masujiro Hashimoto founded The Kwaishinsha
Motor Car Works in 1911. In 1914, the company
produced its first car, called DAT.
It was renamed to Kwaishinsha Motorcar Co.,
Ltd. in 1918, and again to DAT Motorcar Co. in
1925.DAT Motors built trucks in addition to the DAT
and Datsun passenger cars. In 1934, Aikawa “separated the expanded automobile parts division of
Tobata Casting and incorporated it as a new subsidiary, which he named Nissan Motor (Nissan)”. At
that time the company managers planned to produce 10 or 15 thousand sedans annually.
A year later first mid-sized Datsun vehicles were
manufactured in Yukohama plant. Nissan became
the symbol of modernization and industrialization
before the World War II. During e war, the company
produced military trucks, plane engines and military
boats. In 1945 Nissan resume production of civil
equipments and cars. Afterward it sold its first Datsun trucks in the US.
In the course of 1960s and first years of 1970,
Nissan continued to export its products to the US by
selling 225 thousand cars yearly. The fuel crisis in
the US declined the country’s car demand. The US
auto market preferred cheaper and more economy
cars such as Nissan, Honda and Toyota products.
During 1980s Nissan companies became one
of the leading car exporters to the North American
countries. It also founded two giant car manufacturing plants in the US and UK and offered vehicles
name Nissan in 1983. Sunny is a successful example of those cars. In 1993 Nissan’s Micra sedans
which had comfortable designs won the Car of the
Year title.
53
Cars of the Future
54
T
he process to manufacture the fastest and greenest cars with
lowest fuel consumption promises a new light on horizon beneath which vehicles are developed so that they probably can
fly and will not need any kind of fuel.
Last year a picture was issued from production line of a Formula 1
super car, in which was shown manufacturing process of a new vehicle
as the second car of Formula 1 old team.
McLaren Automotive Ltd. whose production lines have been solely
specified for manufacturing Formula One racing cars since 1998 permitted a photographer to enter the factory and issue the pictures of its
cutting edge technology for manufacturing new MP4-12C cars. The car
costs 266$ in the market.
55
First Flying Car
American Terrafugia Aviation
Company embarked on the latest
endeavor of taking the flying car
out of the pages of science fiction
and making it a transportation reality during New York Auto Show. The
new prototype car is licensed not
only to drive but also to fly.
“This street legal plane is the
world’s first vehicle to have met
both the standards of the Federal
Aviation Administration and the
National Highway Traffic Safety Administration”, said Cliff Allen, Vice
President of Sales at Terrafugia.
The four wheeled machine with
retractable wings is known as the
‘Transition’.
Terrafugia says it expects to release the flying machine with a
price tag of approximately 279
thousand dollars.
Aerodynamic Car
Last year, Jaguar designed its
new concept car whose aerodynamic shape is designed to deflect air away from the engine and
around the car itself, said to be 60
percent more power efficient.
It would work by using broad side
deflectors that intake and push air
over the front wheels, across the
side panel of the car and then out
the large rear openings to greatly
reduce drag.
The XKX’s body would be covered in a layer that houses microscopic ripples of piezoelectric cells
that, when stimulated by airflow,
could produce electricity to recharge the car’s battery.
Using this progressive technol-
56
ogy, Jaguar might be able to use
any kind of energy to drive its cars.
XKX would be soon unveiled as a
car with state-of-the-art technology.
Fastest Super Green Car
Super cars are usually famous
for their high fuel consumption; but
a German automaker has designed
a new car which notwithstanding
its 323 kilometer speed, is a fuel
economy vehicle. Auto experts call
the mentioned car an environment
friendly super car.
Porsche luxury car manufacturer
has designed a new vehicle called
Porsche 918 Spyder whose fuel
consumption is 3 L/100 km. Its low
fuel consumption is even more economical than Toyota’s Prius model.
Diamond Car
German tuner Gemballa has announced an innovation that should
lead to many cars that surpass the
gaudiness of even its own goldsplashed Mirage GT Gold Edition.
It’s a car finish made from crushed
diamonds.
“When Gemballa speaks of diamonds, we really mean it”, says
CEO Andreas Schwarz. “Our complex process uses genuine diamonds as its key ingredient – not
metal pigments, glass fragments,
or crystals.”
800 klm Without Charging
Despite their green credentials,
electric cars still come up short
against their petrol-powered cousins when it comes to range -- how
far they go before the battery needs
recharging.
A Danish consortium of three
companies took out the most usual
shortcoming of green cars and introduced a new “range-extended”
electric vehicle equipped with the
latest fuel cell technology which is
promising to close the gap going
800 kilometers without recharging.
Movie Projector Car
Smart Forstars Company gave
the world a taste of the future with
its concept car; an electric car with
a movie projector mounted on the
front!
The car was introduced at the
2012 Paris Motor Show, the Forstars concept is a Sports Utility Coupe (SUC) with unique features like a movie projector that is
mounted on the front which gives
you the ability to create a personal
movie theatre; taillights that can be
opened with one that houses the
charging socket for the battery.
Insect Car
Toyota’s latest concept car is
dubbed the Smart Insect and is
somewhat reminiscent of a Smart
car, if only a tad smaller.
The car is proper for those who
like driving distinctive vehicles and
its designers named it as it should
be. The little electric vehicle charges from a standard 100 V outlet and
is equipped with gull wing doors
that open widely.
Most Powerful SUV
An engine output of 550 horsepower makes the new Porsche
Cayenne Turbo S the flagship
model of the Porsche SUV range.
Thanks to its sophisticated active
suspension, this top athlete with an
SUV styling surpasses the driving
dynamics of many sports cars.
The Porsche Cayenne Turbo S
is designed for optimum driving
dynamics throughout. That’s why it
comes with all relevant control systems as standard. The combination
of air suspension and PASM active
damping control is borrowed from
the Cayenne Turbo. This is complemented by the Porsche Dynamic
Chassis Control, which eliminates
swaying in corners almost entirely,
resulting in improved agility and
comfort.
The Porsche Torque Vectoring Plus, which is also standard
equipment in this model, uses variable torque distribution to the rear
wheels, and an electronically controlled rear differential lock, which
translates into more agility in all
driving situations. The 2013 Cayenne Turbo S boasts 550 horsepower, allowing it to motor from
0 - 60 mph (96.5 km/h) in just 4.3
seconds, and reach a top speed of
281 km/h.
Although the car is only an initial
and undeveloped model, it seems
that its designers plan to drive the
vehicle to the market until 2015.
Car Under Driver’s Order
Most efficient car
Japanese Nissan Car Company
unveiled the NSC-2015, a vehicle
that can drive and park itself.
The idea is that once you arrive
at the entrance to a parking lot, you
simply hop out and hit the ‘park’
button on its accompanying smart
phone app.
The Volkswagen XL1, which has
been deemed the world’s most efficient car, capable of a staggering
313 miles per gallon.
The car needs just 3.78 liters of
gasoline for driving a distance of
500 kilometers. VW XL1 will be
soon revealed by the biggest Ger-
Hybrid Luxury Car
The first examples of Cadillac’s
range-extended electric ELR have
rolled down the assembly line at
GM’s Detroit-Hamtramck facility.
That’s where Chevrolet already
assembles the Volt range-extended
car, on which the more luxurious
ELR coupe is based.
When the ELR goes on sale, it will
be the market’s first electric luxury
coupe with an extended range, GM
North America President Mark Reuss said. The car was first unveiled
at Detroit auto show in 2009.
Fast and Green
McLaren Caar Manufacturing
Group which produces high speed
cars for famous Formula One races, revealed Britain’s fastest sedan
in March.
The car is capable to motor 0-100
km/h in only three seconds and
reach the highest speed of 350
km/h. the hybrid super car is also
friendly to the environment.
man automaker.
The radical VW XL1 will be powered by a tiny 800cc diesel engine
and a separate electric motor and
battery pack.
This will give the plug-in hybrid a
0-62mph time of 12.2 seconds and
a top speed limited to a modest
99mph.
Hybrid LaFerrari
Ferrari adapted a cutting-edge
technology to produce a hybrid
supercar that uses a bit less fuel,
emits fewer grams of CO2 and accelerates to 60 mph in less than 3
seconds.
The Ferrari LaFerrari captures excess power under braking or when
the engine produces a surplus of
power to a battery pack and then to
two electric motors. One provides
boost to the V12 gasoline engine
and the other drives accessories.
The LaFerrari is perhaps the most
electrifying debut at this year’s Geneva show, and not only because of
its sleek carbon-fiber body or its top
speed of more than 350 kilometers
per hour.
Ferrari La-Ferrari produces total
963 horsepower from which 163
horsepower is produced via electric
and the rest of the 863horsepower
is produced by the combustion. It
sprints from 0 to 100 mph in 2.9
seconds which is equal to Lamborghini Aventador.
It can also overtake F12 Berlinetta and finish a specified path three
seconds sooner.
57
REPORT
Modern Global Automobile
Industry
oday, the modern global automotive industry
encompasses the principal manufacturers,
General Motors, Ford, Toyota, Honda, Volkswagen, and DaimlerChrylser, all of which operate
in a global competitive marketplace. It is suggested that
the globalization of the automotive industry, has greatly
accelerated during the last half of the 1990’s due to the
construction of important overseas facilities and establishment of mergers between giant multinational automakers.
Industry specialists indicate that the origins in the expansion of foreign commerce in the automobile industry,
date back to the technology transfer of Ford Motor Company’s mass-production model from the U.S. to Western
Europe and Japan following both World Wars I and II.
The advancements in industrialization led to significant
increases in the growth and production of the Japanese
and German markets, in particular. The second important trend in industrial globalization was the export of
fuel efficient cars from Japan to the U.S. as a result of
the oil embargo from 1973 to 1974.
Increasing global trade has enabled the growth in
T
58
world commercial distribution systems, which has also
expanded global competition amongst the automobile
manufacturers. Japanese automakers in particular, have
instituted innovative production methods by modifying
the U.S. manufacturing model, as well as adapting and
utilizing technology to enhance production and increase
product competition.
There are a number of trends that can be identified by
examining the global automotive market, which can be
divided into the following factors:
Global Market Dynamics - The world’s largest automobile manufacturers continue to invest into production facilities in emerging markets in order to reduce production
costs. These emerging markets include Latin America,
China, Malaysia and other markets in Southeast Asia.
Establishment of Global Alliances - U.S. automakers,
“The Big Three” (GM, Ford and Chrysler) have merged
with, and in some cases established commercial strategic partnerships with other European and Japanese
automobile manufacturers. Some mergers, such as the
Chrysler Daimler-Benz merger, was initiated by the European automaker in a strategy to strengthen its position
REPORT
in the U.S. market. Overall, there has been a trend by
the world automakers to expand in overseas markets.
Industry Consolidation - Increasing global competition
amongst the global manufacturers and positioning within
foreign markets has divided the world’s automakers into
three tiers, the first tier being GM, Ford, Toyota, Honda
and Volkswagen, and the two remaining tier manufacturers attempting to consolidate or merge with other lower
tier automakers to compete with the first tier companies.
1st Tier Company Mergers - Volkswagen-Lamborgini;
BMW-Rolls Royce
2nd Tier Company Mergers - Chrysler-Mercedes
Benz; Renault-Nissan-Fiat
3rd Tier Company Mergers - Mazda-Mitsubishi; KiaVolvo
This section presents literature that examines three
major automotive markets in North America, Europe and
East Asia. This material is intended to provide a thorough examination of industry trends, structure, and the
effects of global market dynamics of the automotive industry within each region, as well as their interrelationships, followed by literature researching the East Asian
automotive market.
North American Automotive Market
The automobile manufacturing industry is one of the
largest industries within the U.S., and is a vital engine
for the U.S. economy contributing greatly to employment and productivity. Reports indicate that motor vehicle production represents over 5 % of the U.S. private
sector GDP.The U.S. is the world’s largest producer and
consumer of motor vehicles with production reaching
12.2 million units in 2002. The U.S. automotive industry continues to experience on-going organizational and
technological change, and have taken steps to increase
its global presence by expanding global alliances and
seeking greater collaboration with other U.S. automakers.
The Big Three U.S. automakers makeup approximately 76 % of U.S. passenger vehicle production, while Japanese automakers, Toyota, Honda, Nissan, Mitsubishi,
Subaru, Isuzu represents 18 %, and European automakers, BMW and Mercedes (division of Daimler-Chrysler)
make up nearly 2 %.
59
REPORT
Unlike the Japanese and European automotive markets, the U.S. does not rely significantly on foreign exports. The U.S. auto trade relies mostly on its own domestic market, and to some degree on the Canadian
market. Canada is the largest market for U.S. vehicle
exports with subsidiaries of U.S. automakers accounting for most of the imports. Integration of the U.S. and
Canadian automotive industry dates back to the U.S.Canadian Automotive Products Trade Agreement established in 1965.
The U.S. Big Three automakers continue to invest
billions of dollars into the Canadian market, which has
resulted in Canada becoming a global leader in automotive engineering. All of Canada’s passenger vehicle
production is located in Ontario due to its close proximity
to Detroit.
European Automotive Market
The European Union is made up of 15 member states,
and any European country applying for membership.
The EU is the world’s largest automotive manufacturing region and the world’s largest market. The European
automotive industry represents approximately 9 % of
the EU manufacturing sector. The European automotive industry is considered a leader in the global market
with integrated operations consisting of: research, design, development, production and sales. The European
automotive market is comprised of a concentrated and
sophisticated global network, which includes joint-ventures, cooperatives, productions and assembly sites. EU
automotive industry producers have a combined output
that exceeds that of the U.S. and Japan, however no
one individual EU country produces more than its U.S.
or Japanese competitor.
The importance of the automotive industry on the
economies of individual EU countries varies country to
country. According to recent reports, Germany, Sweden,
France and Spain automobile production represents approximately 10 % of total manufacturing, while the average for the EU is about 8 %. The EU’s largest automotive producer is Germany estimated at 30 % of EU’s total
production, followed by France at 19 % and Spain at 17
%, and the United Kingdom at 10 %. These countries are
the largest automotive markets in the region.
There are over 20 vehicle manufacturers in the EU,
with the largest automakers producing multiple brands,
such as General Motors, Ford, DaimlerChrysler, Volkswagen, Fiat and Peugot Citroen. There are also independent automakers, such as Porsche, BMW and Bertione. The last 10 years has shown an overall increase
in vehicle production for the EU auto industry, along with
Extra-EU exports accounting for approximately 20 % of
total production.
Like the other markets in the global automobile industry trade, the EU auto industry has experienced significant restructuring and consolidation, which includes
mergers, such as ChryslerDaimler-Benz; GM acquisition
of Saab; Ford’s acquisition of Jaguar and Volvo’s pas-
60
senger car division; BMW’s take over and then sale of
Rover; and Volkswagen’s acquisition of Bentley, Lamborgini, SEAT and Skoda. There continues to be co-production efforts and supply arrangements among the EU
automakers, as well as with foreign partners outside of
the European Union.
East Asian Automotive Market
The Asian motor vehicle market is comprised of three
‘core’ markets, Japan, South Korea and China. The Korean and Chinese automotive markets continue to grow
rapidly, with many analysts predicting that the Korean
and Chinese markets will surpass that of Japan within
a decade.
The Asian financial crisis during the late 1990’s slowed
down the demand and production of the auto industry,
and did not reach pre-currency crisis levels until 2000.
However, with the continued strong production growth
of the automotive industry in Asia, analysts suggest that
the Asia/Pacific region will be a driver of industry growth
worldwide. As the automotive manufacturing industry
continues to grow in Asia, foreign investment has begun to increase substantially in Asia over the last several
years. U.S. and European automakers have targeted
the region to not only establish a greater presence in
the Asian marketplace, but also to expand its production
capacity in Asia. In addition, there have been undertakings by both the U.S. and European automakers to collaborate with Asian automakers.
Japan’s Automobile Industry
The automotive industry represents a significant portion of Japan’s economy, representing 13 % of its total
manufacturing output and 10 % of employment. Japan
is home to 11 automobile manufacturers consisting of:
Toyota Motor Corp., Honda, Nissan, Mazda Motor Corp.,
Isuzu Motors, Ltd., Suzuki Motor Corp., and Fuji Heavy
Industries, Ltd., and Daihatsu Motor Co. Each of these
automakers have manufacturing operations in the U.S.
except Suzuki and Daihatsu. However, Suzuki is part of
a joint-venture with GM, which is located in Canada.
Japan is also the third leading producer of motor vehicles after the U.S. and the EU. The U.S. is the largest
market for Japanese vehicle exports; however, automobile production has fluctuated downward over the last
several years in Japan. Like the auto industries in the
other regions, the industry has also experienced major
restructuring, which is the result of a downturn in domestic demand. Japanese automakers have responded
to stagnate domestic economic conditions by reducing
production capacity through plant closures, and have offered equity ownership to foreign automakers to receive
financial and managerial assistance. GM has equity in
Suzuki and Subaru and controlling interests in Isuzu;
Ford has majority equity in Mazda; DaimlerChrysler has
majority equity control in Mitsubishi; and Renault has
controlling interests in Nissan.
The Japanese automotive industry relies heavily on
REPORT
exports with imports making up a much smaller percentage of auto trade. German automaker imports account
for the greatest percentage of imports at nearly 70 %.
However, trade barriers on foreign automotive imports
in Japan have often created problematic trade relations
with U.S. automakers and U.S. trade policy officials.
South Korea’s Automobile Industry
Presently in South Korea, there are seven automobile
manufacturers, which include: Hyundai, Daewoo, Kia,
Samsung, Asia Motors, Jinda, and Ssanyong. South
Korea is the world’s third largest automobile exporter,
exporting 41 % of its total motor vehicle production, with
roughly 35 % of the exports going to the U.S. South
Korea is the 6th largest automobile market, however
imports makeup less than 1 % of motor vehicle trade
in the domestic market. Prior to 1987, foreign auto imports were prohibited and Japanese automotive imports
were not permitted until 1999. South Korea’s automotive
industry has also experienced restructuring. In 1999,
Hyundai acquired Kia and Asia Motors, and sold 10 %
of its equity to DaimlerChrysler in 2000; Daewoo purchased 52 % equity in Ssanyong in 1998; and GM purchased 42 % equity of Daewoo; and in 2000, French
automaker Renault purchased Samsung Motors.
Currently, South Korea has no independent auto manufacturers. DaimlerChrysler and Hyundai Motor Co.,
have formed an alliance in which DaimlerChyrsler will
acquire a 10 % equity in Hyundai. Korean automakers
have made efforts to join in collaborative ventures with
foreign automakers and sold significant portions of its
equity in order to continue to operate in the domestic
market, as well as receive financial assistance. Industry specialists suggests that in order to become more
competitive and efficient in both the domestic and foreign markets, Korean automakers must consolidate
platforms domestically and with foreign partners; create
strategies that more efficiently utilize regional sourcing;
and enhance production and production platforms, as
well as supply networks.
China’s Automobile Industry
China’s automobile industry continues to grow rapidly.
It is projected that by 2010, China will become one of the
world’s largest automobile markets with domestic production reaching 5 million units. The automobile industry
in China is composed of 120 vehicle manufacturers, employing nearly 2 million workers.
The FAW Group is China’s first large-scale motor vehicle producer, which has an agreement with Volkswagen
to produce Jetta’s and Audi sedans. The second largest automaker is the Dong Feng Motor Corporation with
three major production facilities in the Hubei province.
The Shanghai Motor Group, the third largest automotive producer in China, began producing cars during the
1960’s. It established a joint-venture with Volkswagen in
the 1980’s that has contributed to the increase in automobile production in China’s domestic market.
Government officials in China have initiated policies
that are intended to encourage the continuing development of China’s domestic automobile manufacturing industry. Nevertheless, there are significant trade barriers
for foreign competitors in the way of tariff policies that
are applied to foreign auto imports. This restrictive trade
environment has contributed to the serious problem of
illegal imports of foreign cars into China.
Despite China’s growing auto industry, industry productivity lags behind the other Asian competitors, and it
lacks the ability to conduct research and development,
relying on its foreign partners to develop new vehicles.
Chinese automakers are presently creating new policies
and methods through foreign joint-ventures to continue
the development of China’s automotive industry, but at
this stage, China’s automotive industry still remains underdeveloped both technically and managerially. These
conditions present a significant challenge for China’s
automotive industry, and it is expected to take a considerable amount of time before China becomes a global
competitor in the automotive market.
61
Tehran’s
Most
Luxurious
Cars
ome domestic and local
companies need one or
two billion rials to revive
and continue functioning,
but some very rich people
par such amount of money to buy
the most luxurious cars.
Today these splendid and extra
expensive sedans can be seen noticeably in Tehran streets. We do
not talk about only cars like BMW or
Mercedes-Benz, but we would like to
point to the most exclusive cars such
as Maserati, Porsche,… whose imaginations of existing in Iran market
was only a dream.
Entering luxury cars to Iran auto
market was a good event came
about when auto import was liberalized in Iran; the vent which changed
our car market drastically and turned
it various.
Reviewing Iran auto import history
S
62
shows that before free car import
policies being enforced auto markets
was totally in hands of few domestic
firms and only several old classes
of BMW and Benz ran in Tehran
streets. When auto import liberalized
Iran poor auto market welcomed foreign famous car brands so that every
day we can see a brand new car in
streets. Some of these luxury cars’
temporary pass permits were not extended and others were localized.
Before nobody even thought about
such luxury and expensive car, but
today many middle-class families
talk about the price of such sedans,
which can be seen significantly in
Tehran and big cities streets. If these
cars hurt, the money to be paid for
compensation is equal to the price of
a brand new domestic vehicle. This
is while fluctuation of dollar price and
high rate of inflation makes no differ-
ence for upper classes of the society. They always are affluent and
able to afford to buy extra expensive
cars. The general speed limit on Iran
roads and highways is 120 km/h,
though it did not prevent rich people
order and buy super sport cars.
Many superb cars like Bugatti,
Ferrari…have been imported to
Iran since car import liberalization in
2001, but here we only go through
those brands which have official
dealership here.
Porsche, most luxurious in Iran
Porsche Automobile Holding SE,
usually shortened to Porsche is a
German holding company with investments in the automotive industry.
The company was founded in
Stuttgart, Germany, in 1931 by Ferdinand Porsche, an Austrian engineer
born in Maffersdorf, during the time
of the Austro-Hungarian Empire. The
company has been producing sport
and super sport cars.
The products of this famous brand
entered Iran market in 2010. Moein
Motors is the official dealership of
Porsche in Iran which is located
in 11th km of Karaj Special Road.
When Porsche was first imported to
Iran, the people were shocked for it
is one of the most world luxurious
cars.
As per the conducted statistics
by Islamic Republic of Iran Custom
Organization about 160 Porsche
sedans valued at 20 million dollars
were imported to Iran during first
five months of the last Iranian years.
In other words, 563 German Porsche sedans began to run in Tehran
streets in the last Iranian year (ended March20).
According to Roudabeh Seddighi
the head of public relations office of
Moin Motors 800 of Porsche sedans
were imported to the country during
last two years. She expressed her
hope that it will sell 800 sedans in
its third year of entrance. However
realization of this prediction seems
a little difficult since exchange rate
fluctuation does not stop.
As per the statistics most of these
Porsche sedans are imported from
the UAE and few of them from its
birth place Germany. As mentioned
before, Porsche is one of the most
expensive luxury cars in the world
which is being sold much more expensive than in other countries.
This is for continuous fluctuation of
exchange rate. Now there are eight
models of Porsche sedans in Iran—
Porsche Boxster, Cayman S, 911
Carrera, Panamera, Panamera 4S,
Cayenne, Cayenne S and Cayenne
Turbo. The lowest price of these
cars is 335 billion rials (Cayman
S) and the highest 800 billion rials
(Cayenne Turbo).
Maserati, a Shocking Car
In late 2011 summer, some good
news trembled Iran auto market; super Maserati sedan was on its way
to Iran market. At that time Maserati
affiliated by Fiat Automotive Group
announced that it wanted to set up
an official dealership in Iran.
Bahram Gheysarzedeh the former director of Moin Motors was the
first who could win Maserati official
dealership directly from the Italian
company. So Atatak Company has
been functioning as the official importer of these super luxury cars in
Iran. Maseratis are unique for their
allure, elegance and state-of-the-art
63
REPORT
technology.
As per Custom Organization statistics,
only ten Maseratis were imported to Iran
during 2011 of which five was imported from
its main origin Italy and five other from the
UAE. The sedans valued at one million dollars each.
The statistics also show that more than 34
Maserati sedans were imported to the country during first five months of the Iranian year
of 1391 (ended March 20, 2013) valued 3.9
million dollars (50 billion dollars).
Quattroporte S, GranTurismo and Quattroporte are three models of Maserati presented in Iran. Maseratis are being sold 775
to 850 billion rials.
Mercedes-Benz With No Exact Figures
Benz is the oldest imported car to Iran
which started in 2003 and “Setareh Iran”
won the official dealership of the brand.
Before that Class A, B, C, GLK, S, SLK
and CL of Benz were imported to Iran numerously. But unfortunately this luxury old
brand does not export any of its products to
Iran.
There are no exact statistics on the total
number of imported Benz sedans to Iran;
however, Iran Custom Organization announced that 1163 Benz sedans valued at
66 million dollars were imported to the country during last year.
Mercedes-Benz 500SL is the most expensive model of Benz in Iran whose price is
estimated at 850 billion rials. The cheapest
model is Mercedes-Benz 180b with the price
of 140 billion rials.
Unwelcomed BMW
BMW was ranked the second imported
luxury car to Iran after Mercedes Benz. Ali
Nouriani was the first importer of BMW brand
to Iran. He said to Sharq Persian language
Newspaper in 2010 that he imported about
eight thousand BMW sedans to the country.
Gradually, Nouriani Enterprise was replaced with Persia Khodro as the official
dealership of BMW sedans. Unluckily Iran
importing BMW sedans has been stopped in
the current year and shocked all BMW fans.
Its exports to Iran dropped to less than 50
sedans during first five months of the current year which that BMW is gradually leaving Iran market. BMW sedans are cheaper
than other mentioned luxury brands in Iran.
The cheapest (i320) price stands at 230 billion rials and the most expensive (x6) at 550
billion rials.
64
Production of Economy Cars
a Way Toward Growth
I
ran economy is struggling to pass through strict international sanctions. The country’s auto industry was developing fast, but said
restrictions hindered its expansion. The question is how much Iranian car industry was hurt and how could it retrieve from the crisis?
The country’s car sector has got caught up in inflations caused by high
exchange rates and international sanctions; therefore, auto and spare
parts prices increased peculiarly. Experts suggest that producing cheap
cars and auto parts relying on domestic trained forces and investment
could be an unfailing solution for Iran car industry. This is while many
hurdles lie on the road of such a cure for the problem; however, blessing
recent developments Iran auto industry will be able to retrieve its position
in the country’s economy using the mentioned solution.
In this regard as per the conducted studies by a research institute,
domestically produced cheap cars are the very thing for preventing auto
industry’s collapse. On the other hand, market is facing up to a serious
slump in developed countries, so car markets in developing states are
power engine for them to boost their auto sector. So they have to manufacture cars based on the Third World needs. In other words, customers’
expenses and cars’ upkeep and prices should be low. In contrast, the
producer too has to decrease its expenditures and upgrade the quality of
its products to maximize profitability of their task.
There are several strategies in order to launch cheap car manufacturing due to world countries’ different identities and unlike regions. In between, several elements like economic boom, developed infrastructures,
several tastes of customers, traditions and nationalism are effective factors that make characteristics of consumers’ demands different in fast
developing countries like Brazil, Russia, India and China (Bric region).
On the other hand market growth is distinct in different countries. For
example the trend of market growth in South Korea in past 20 years
looks like China’s market situation today. This made young citizens and
burghers believe their country is not included in fast developing economies.
As per the latest findings of “Just Auto” institute manufacturing cars
with lowest expenditures has several characteristics in world auto industry.
First, there are not any defined sectors or classes for producing low
price cars. In other words “cheap car” is a concept which is comprised of
quantity, quality, type and prices in the market.
Second, each sedan can be highly profitable when it has more options
and cutting-edge necessary equipments.
Third, it is difficult to manufacture a single model of car for developing
countries all over the world. However there are few special similarities
between several regions of the world like Latin America, India, China and
Russia. In the meantime some very cheap cars akin to Tata Nano are
only demanded in India and poor south Asian countries due to climate
and economic conditions. So because of low demand producing such
cars by more auto firms would be less profitable.
Innovating new cheap cars in newfangled markets is also attractive for
developed economies. For instance although its low production expenses and marketing, “Logan” was warmly welcomed in South European
countries. Tata Nano too could be sold to a great degree economic crisis
torn countries in EU. This is for the reason that these people do not mind
luxury trappings of the car and only its sole objectives which are transportation, driving and environmental functions are important to them.
Compiling a program to produce cheap and economic cars would be a
valuable experience for Iran car managers. The least profit it would have
is that the car would meet the demands of domestic customers. It would
also accelerate auto industry development and prompt market growth.
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REPORT
Foreign Firms Waiting to
Return to Iran
D
uring last decade many
foreign firms withdrew
from Iran market due to
international
sanctions
against the Islamic Republic of Iran.
Yet after the last presidential election in Iran (June 15th, 2013) and
selecting a middle-roader president
by ballot, many of major industrial
states intend to return to Iran and
revive their economic and industrial
relation with the country. They also
hope that the new government project new policies to call off the sanctions and remove the hurdles on the
way of economic relations.
Just a day after Iran’s 11th presidential election when Hassan Rowhani was announced as the elected
president, many industrial countries’
66
statesmen sent congratulation message to the elected president and
announced their tendency to revive
their relations and economic talks
with Iran.
In the meantime these developments were good news for foreign
firms and ventures that had long
benefitted from Iran market and
were awaiting an opportunity to return to Iran’s attractive and highly
potential market.
One of these companies is French
Renault whose activities in Iran were
affected by crippling economic sanction against the Islamic Republic.
The well-known auto firm has declared that it is keen on perking up
its relations with Iran’s auto industry
and act again as a member of this
boom market of the country.
New Iranian president who is worried about isolation of his country
vowed to reset the relations with
France. The European country was
Iran’s fourth trade partner in the year
2000, yet it ranks 15 now. French
firms and ventures that left Iran for
political matters and due to international sanctions against the Islamic
Republic, hope to return and revive
cooperation with their old partner.
After imposing sanctions and restriction against Iran and when the
US and Zionist Regime put up probable military attack on the country,
French companies showed propensity to withdraw Iran market even in
the fields that were not included in
sanctioned sectors like food, phar-
REPORT
maceuticals and auto industries.
Catherine Cruisinier French Foreign Ministry Spokesman said,
“French companies do not concentrate on this market (Iran’s) and it is
not our aim.” Such statements show
the hard-line stand taken by former
French President Nicolas Sarkozy
which is still followed by the new
government. France exports to Iran
have declined by 70 percent to 800
million euros (from two billion euros)
since 2005.
An expert in National Center for
Scientific Research, known by its
French initials CNRS, said in this regard, “from a symbolic point of view
the losses made by decline of trade
ties with Iran was very high. Before
Sarkozy’s presidency, France was
Iran’s first industrial partner and
France paid more for following sanctions against Iran comparing to other
countries.”
He further said that other western
countries especially the US did not
lose a lot after imposing sanctions
against Iran. The expert added the
US also imposed sanctions against
Iran by putting D’amato plan (1996)
aimed to press the country’s fuel
and oil industries, but the Americans
continued their exchanges with Iran.
He noted that Americans went on to
export their products such as Coca
Kola, Apple computers, iPhone…
secretly.
Ali Ahani, Iran ambassador to
France, says that the US exports
to Iran has increased by 50 percent
during last two years; this while the
US has forced Europeans decline
their oil imports from Iran by half.
Danone Group, working under Sahar title in Iran, and also Damanvand
Mineral Water Co. resisted sanctions and continues their business in
Iran. Sanofi, the French multinational pharmaceutical company, too ignored the sanctions against Iran and
carried on to export pharmaceuticals
and vaccines to the country.
Carrefour, the French multinational
retailer, is another French company
that its name was seen in the list of
ICCIM partners; though the company has denied any cooperation with
Iran. The company’s officials stated
that the business was followed by
Majid Al Futtaim Holding, one of its
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REPORT
franchisees. They also noted that
they do not do any business in Iran
for the country is not within the confines of their geographical zone.
Majid Al Futtaim Holding is based in
Dubai and built three hypermarkets
in Iran whose logo reminds the logo
of Carrefour.
Auto Industry
French car maker Renault, one of
the last large European companies
still active in Iran, has never denied
its presence in Iran market but is acting cryptic.
Renault has been active for years
in Iran, where it sells kits of semi-assembled vehicles that are built up by
its Iranian joint venture partner Iran
Khodro. But international sanctions
over Iran’s nuclear program have
made doing business in the country
68
much more challenging.
A spokesman of Renault Company
who wanted to be unknown said, “although sales transactions are currently slowed down in Iran, we are
doing business well in the country.”
He said that though Iran’s share of
Renault’s global sales has now fallen to just 2% from 4%, the impact of
ceasing to do business there could
be magnified because it could force
the company to write down the value
of kits that are either unpaid, or on
which payments cannot be repatriated outside Iran, according to the
people familiar with the matter.
EU and the US banking regulators
and Treasury officials have an obligation to make Swift stop its dealings with Iranian banks. This made
operators and foreign companies
using other complex ways to do their
business and use swift facilities.
These complexities forced Peugeot cut down its activities and business in Iran in February 2012. Iran’s
market was so profitable for the
French giant automaker that it sold
more than 45 thousand cars in the
country during 2011.
Peugeot is only delivering spare
parts to Iran-Khodro for assembling
vehicles. In fact, Peugeot sees a decreasing market share in Iran. During the first quarter of 2007, 31,000
vehicles under its brand were produced there, a 35 percent fall compared to the same quarter in 2006.
However, while Peugeot wants to
ensure payments for deliveries, it is
not investing new funds.
Ahani says in this regard that
Peugeot alliance with the American
carmaker GM was the major fac-
REPORT
tor that forced the French company
withdraw from Iran’s big market. He
says the American firm put a lot of
pressure on Peugeot to cut its relation with its 35-year partner.
The French automaker hopes to
benefit from GM credit and dynamism to revive itself. Europe’s second largest automaker, PSA Peugeot Citroën, has posted the largest
annual revenue loss in its history,
partly caused by the West’s sanctions against Iran. The country was
the French car maker’s second-biggest market in 2011 in terms of trade
volume.
Jean-Baptiste Maunier Peugeot
spokesman says, the problems of
Peugeot are not limited to the sanctions imposed on Iran. Since 2008
the auto market in western countries has been fighting with a serious
plunge. The spokesman further said
that the company is not well active in
new markets like China and India so
it could not confront its problems and
challenges properly.
Ali Ahani the Iranian ambassador
to France said that Peugeot’s withdrawal from Iran auto industry hurt
its name and credit. He said the
French company was highly credited
and welcomed in Iran, but now Iranian companies act more cautious
dealing with Peugeot.
Will Sanctions Ease?
Selecting a moderate politician increased hopes that West will relax
sanctions against Iran; yet it seems
that the sanctions would not ease
immediately. However some foreign
firms and venture like Total have
kept their offices in Iran in order not
to face challenges when ties are re-
newed.
It is worth to mention that the EU
put restrictions on Iran oil industry
in 2012 and forced Total wind its
business down in Iran. Iran has the
fourth oil reserves in the world.
Before imposing sanctions against
Iran, Iran sold 80 thousand barrels
of oil per day to the French Total.
On the other hand Total agreed to
pay more than $398 million to settle
Securities Exchange Commission
(SEC) and Department of Justice
(DOJ) charges for violation of the
Foreign Corrupt Practices Act.
Total would pay the SEC $153 million and the DOJ $245.2 million related to charges that the French oil
major paid $60 million in bribes and
continued to develop Iranian oil and
gas fields.
69
A Strategy for becoming more
Competitive
I
ntegration, shared production,
having a business partners
familiar with the most recent
knowledge, etc. are some of
the ways to develop industry, because despite some improvements
occurring at the country level, in
order to gain knowledge at the international level it is recommended
that we exactly use the knowledge
of that level; and this matter will not
take place unless we take part in the
international level and enter shared
production.
However, with extended integrations taking place in global auto
manufacturing and parts manufacturing, shared production is a matter
that has been focused on by many
experts but has not yet been taken
70
into enough consideration, not even
at the national level.
This is happening to Iran’s automotive industry while it has been
years since international auto manufacturers have been integrated and
received many developments. Besides, many other industries have
also become integrated in the world.
In this regard, a simple approach
for the development and improvement of competitiveness is thought
to be the use of advanced technology and utilization of knowledge at
the international level.
Parts manufacturing is an area
that needs development. About 80
per cent of the quality of an automobile relies on the parts that form it
and Iran in this regard is considered
as one of the countries with superior
potentials in the industry worldwide.
Although printing in millions is economically necessary for international
presence in global networks, it is still
not sufficient; and the required conditions are development and improvement of quality, diversity of products
and creation of a sustainable competitive advantages combined with
the continued decline of prices.
In addition to the integration of
auto manufacturers and capacity
growth, it is essential for the field of
automotive industry and parts manufacturing of our country to prepare
the grounds of strategic alliances
with major industries of the world.
Doing so will provide the opportunity
to transfer knowledge and technol-
ogy, improve quality and sustainability of the industry and prepare
the grounds for export business development and better stability of the
automotive industry on the country.
Appropriate potential capacities
and the current position of Iran in
international automotive industry
and also appropriate advantages of
parts manufacturing industry can all
be the right potentials for strategic
unions. The emergence of supersuppliers through integrations and
owning the greatest parts manufacturers have significantly decreased
the number of first class suppliers
in the automotive industry to only a
few super suppliers and resulted in
the decline of the number of second
class suppliers from thousands to
only hundreds. It is therefore essential that necessary arrangements in
parts manufacturing industry of the
country take place at the right time
and with wise measures to support
international events. The motto of
today’s world is “Networking or Not
Working!” So, individual activities
can no longer guarantee economic
development in various industries including parts manufacturing industry.
The main incentive in the networking
of parts manufacturing and automotive industry is to achieve synergy
and it requires the exchange of human resources, science and technology.
Changing roles in the current era
and the need to re-arranging and
re-engineering the tasks in the automotive and parts manufacturing
value-making chain should be emphasized in each of the processes of
the chain, from the third class parts
manufacturers to the auto manufacturer company. For example, today
the auto manufacturer takes responsibility from customer relationship to
auto design. First Class suppliers
provide systems and manage supply chain. Second class manufacturers provide innovative services
and technology of modules and third
class ones provide raw materials
and perform parts manufacturing
processes. So the key for success
is that all stakeholders in the chain
play their role properly so that there
will be no disturbance in the chain.
In this regard, we can say that
competition together with interaction
and cooperation is a necessary and
sufficient condition in the development of parts manufacturing industry. Our country emergently requires
competition and cooperation to succeed in national and foreign markets
and they are both now available in
the parts manufacturing industry. It
is called competition for cooperation
and cooperation for competition. It
means each of them is ineffective
without the other. So the focus of development strategies on automotive
industry and its subsequent parts
manufacturing must be based on the
principle of competition together with
cooperation and collaboration.
The perspective of resource finding and globalizing the supply chain
in automotive and parts manufacturing industry on one hand and the
reinforcement of relationships with
key suppliers to the aim of gaining
competitive advantage on the other
hand are the two main and strategic
ways of the international automotive
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REPORT
supply. From the perspective of the
supply chain, the future of the automotive and parts manufacturing
industry in Iran is also in the development and reinforcement of the
above mentioned vision and following a strategic direction towards it.
Thus, recent changes in the industry
and trade has facilitated the movement and stressed the importance of
this issue more.
Turkey among the neighboring
countries, due to its strategic location and the growth of parts manufacturing industry in this country, is
becoming one of the poles of the
parts manufacturing and automotive supply chain worldwide. Therefore, this country is one of the best
choices in creating a foreign base
for Iran’s automotive industry supply chain in Europe and CIS and can
act as the gate to take and join Iran’s
supply chain to the international auto
industry.
To this end the custodians of automotive industry of the country from
the governors to small business owners should provide the right grounds
for the connection with international
and big auto manufacturers and for
the globalization of production and
trade in this industry, and by having
the efficient kind of connections with
the international supply networks,
pave the way of Iran’s automotive
and parts manufacturing industry toward international markets.
To develop Iran’s parts manufac-
72
turing industry we need “invigorating actions”. Adding knowledge to
activities and programs, constant
improvement of the quality and institutionalizing cost reduction movements are crucial in the industry. Development patterns that are based
on the current resources of the world
are being obsolete and giving their
places to developments on the basis
of knowledge, creativity, innovations
and technology. Hence the formulation of development programs for the
automotive and parts manufacturing industry without regarding these
matters is completely meaningless.
Following the things mentioned
above, other requirements and proposed strategies for the development and empowerment of parts
manufacturing industry include taking advantage of modern methods
of production as well as standardization approaches, shared production
to achieve economies of scale by
creating variety in products, suppliers and manufacturers.
The reduction of the time and cost
of designing and producing products
and increasing competitiveness in
the industry, increasing the scale for
parts manufacturers and orientation
for the development of work capacities, encouraging re-investments
and developing science and technology to nationalize parts manufacturing industry are all of utmost importance.
Another requirement for the de-
velopment of parts manufacturing
industry of the country is to compensate for the shortcomings and
flaws by supporting the internal production, internal work and capital,
concentration on development and
improvement of the quality of the
products and parts, and avoidance
of copying, distributing or selling
parts with nonstandard quality.
So we can strengthen the industry
by paving the way for the connection
with international supply, production
and distribution networks, attention to the development of technical
knowledge and technology of electronic parts manufacturing in the
country with regards to the nature of
the new generation of automobiles
and the improvement of integrated
network of automotive industry and
programing to become a cheap but
high-quality base of auto manufacturing with respect to parts manufacturing industry in the country.
Furthermore,
utilizing
market
strategy against markets (internal
markets against a share of the international market), attempting to
increase export and attendance in
international auto and parts markets, organizing retails parts and
spare parts stores in the market and
developing professional settlements
for parts making with other countries
can help the parts manufacturing
industry of our country to flourish
more.
REPORT
Iran’s Auto Parts Industry; The
Strategic Industry
Mother and strategic industry, an interpretation of Iran’s auto parts industry by experts and market analysts, is the
industry that provides essential infrastructures to Iran to be an automaker in the world. This industry in Iran, dating
back to the 70s, initiated its activity in manufacturing auto parts with the cooperation of European and Asian companies. Since then, by experiencing a developing process, the number of auto part manufacturing companies has
increased. Growing of the number of part manufacturing companies happened in the postwar condition in which the
car market was an untapped one. As a result, part manufacturing as one of the main sub-branches of automobile
industry evolved. This is a part of our dialogue with the engineer Mohsenian. You can read the full interview below:
Can you tell us your general assessment of Parts Manufacturing
Industry of Iran?
Parts manufacturing in Iran returns
to the first of 70s, when the Iran-Iraq
war was finished and automotive industry, with the cooperation of European and Asian companies, gradually began to develop. Automakers
faced with an oil country and a market which had remained untapped
due to the problems of the 8-yearwar. Economic development, development in political foreign relations,
rise in oil revenues and rise in people’s purchasing power provided fa-
vorable conditions for the growth of
the automobile industry and its major sub-segment, the part manufacturing industry. The production line
of 3-dimentional auto bodies was
established in IranKhodro Company.
Investments from different trades
flowed towards Parts manufacturing industry and Parts manufactures
bought many advanced and modern
production equipment by spending
huge expenses. As a consequence,
Iranian cars were produced with international standards. Actually, the
qualitative and quantitative systems
developed widely among Parts man-
ufacturers and good products were
produced.
In recent years, some political and
economic decisions at the macro
level caused some problems that
appeared in this industry as well.
Cutting slots of energy for Iranian
industries coinciding with the integration of exchange price and some
restrictions in international relations
greatly affected the country’s auto
industry; the most significant of
which was an increase in the prices
of imported goods and hardships in
the financial transfers. Meanwhile,
some industry executives with this
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REPORT
confidence that everything is under
government’s control did not look for
any solution, did not anticipate the
necessary arrangements and procedures and continued their prior manners. Gradually, the development
projects were ceased and rupture
in relations with foreign companies
caused special consequences. All
this happened while privatization
began with reductions in the government’s support for auto industry. As
a result of these events, the auto industry and then, its main segment,
parts manufacturing industry quickly
damaged. On the other hand and
due to the delays in payments, the
financial expenses of parts manufacturers got increased.
What are the highlights of Iran’s
Parts Manufacturing Industry
comparing to the other countries?
The level of technology, economic
conditions, indigenous culture of
production, engineering knowledge
and cooperative European companies are the most significant factors
of Iran’s Parts manufacturing industry. In recent years, most of the Parts
manufacturing companies have established offices in countries such
as the United Arabic Emirates, China, Taiwan, Korea, Turkey and ... to
provide their raw materials and to do
foreign trade. During last years and
through relationships with European
companies, most of the Parts manufacturers have learnt many production techniques but it did not lead to
localization of these techniques or
reduction of production expenses.
In recent years, there were good
opportunities for Iranian part manufacturers to buy European machines
and production lines in lower prices
which could lead to more developments in Parts manufacturing in
Iran; but because of more sanctions
and limited international relations,
this opportunity was lost. I used the
word “technique” not “technology”
for technology has its own specific
and detailed factors which comes
together with economic and social
factors in societies.
Economically, economic conditions during the 70s were so that
74
Parts manufacturers were able to
use the bank facilities or facilities
provided by automakers to launch
the Parts production line. Then, by
receiving prepayment of contract
from manufacturers, they were able
to buy raw materials and meet production costs of the first batches of
the product. But, gradually the conditions changed and the reduction
of supports went so far that not only
there were no longer pre-payments,
but also the prices of the sold goods
were paid with three months or more
delays. In the late 80’s, many of the
Parts manufacturers who did not anticipate these situations met serious
economic problems. Following these
problems, management of supply
chain became difficult for auto makers and then problems for Parts man-
automakers are facing today, do
you think the parts manufacturers
have such capacity to continue
their activities?
Certainly and as the result of auto
makers’ and market’s circumstances, conditions for parts manufacturers have been hard and inappropriate. Meanwhile, there are some
companies, among Parts manufacturing ones, which are investing
and developing. Because of these
problems, many Parts manufacturers were not able to continue their
work or lost their power. Today, most
of them have invested in other domains and have taken out their investments from this industry. Obviously, with the economic revival,
companies that used this opportunity and surpassed the others would
ufacturers were exacerbated. Now,
due to increased exchange rate and
probable boom in automotive market
and industry, Parts industry is also
expected to boom again. Moreover,
reduction in production expenses
provides the opportunities of exports for Parts manufacturers. But,
it is on the condition of reduction in
sanctions and trade restrictions and
of changes in Parts manufacturers’
strategic approaches in this area.
gain more success.
It seems that it is a rule that in
economic stagnation conditions, the
probability of forming experienced
and strong companies will increase.
Actually, although many companies
are involved in numerous problems,
quicker companies will have more
chances to enter and develop new
work. But this is the exception rather
than the rule. Therefore, if the situations continue to go on, major automakers and Parts manufacturers
will face basic damages. But, I per-
Considering the condition that the
REPORT
sonally believe that the situation will
not go ahead as before. Changes in
the government program can help
us to get rid of this situation.
On the other hand, as the answer
of your question I can say that the
development in auto industry and
huge investments in it are significant
factors shouldn’t be forgotten. This
investment has provided the capacity of producing over two million
vehicles per year and therefore has
created a big market for Parts manufacturers. This production capacity
will put us in the tenth or eleventh
place in the world ranking. However,
in recent years, due to the problems,
our actual production rating has
plummeted to the seventh place.
Before the years of crisis in Iran, automobile manufacturers managed
to produce a large number of cars
from which a great deal were sold in
domestic markets. Consequently, a
large market in spare parts and aftersales services was created. This
market helped many parts manufacturers to survive in recent years.
Can you tell us about the level of
Iranian Parts Manufacturers from
technology points of view?
Answering your question in a general view is difficult. Technologically,
Iranian Parts manufacturers are on
a spectrum. At one extreme, there
are Parts manufacturers with the
most advanced production lines
and testing equipment imported
from European countries which are
producing auto parts with their partners’ close cooperation and support. At the other extreme, there are
some Parts manufacturers with the
minimum necessary standard equipment or maybe nonstandard ones
which are manufacturing Parts. So,
between these two extremes, there
are Parts manufacturers who have
imported secondhand equipment
and production lines, and try to produce auto Parts with acceptable
qualities by machineries which are
considered old now. Since I had the
opportunity to visit many reputable
auto parts manufacturing companies
in European and Asian countries, I
can judge that Parts manufacturers
who produce original parts (OE) for
Iranian auto makers are working an
appropriate and internationally acceptable level of quality. Certainly,
recent sanctions have reduced foreign companies’ supports and have
caused some problems, but in some
technological areas it has led to independence. For example, there
are some developed and advanced
factories in Iran which are producing
pistons, cod rods and fuel systems.
Moreover, the Peugeot engine cylinder and cylinder head machining
lines in Iran are perhaps unique in
the world, as many of the French
Peugeot employees were willing to
visit these lines as soon as they arrived in Iran.
In which sector of this industry do
we have any competitive advantages?
Iran, in terms of metal and polymer
materials, in comparison to many
countries has the advantage. For
example, aluminum and steel industries are at an acceptable level. In
addition, Petrochemical industry and
some polymeric products with good
quality and price are available in this
country. Meanwhile, the increase in
the exchange rate has led to a lower
cost of production. Therefore, taking
into account two factors of raw materials and production costs, it seems
that there would be enough capacity
for business development in many
sectors of Parts manufacturing industry. On the other hand, the local market has always had enough
charm for foreign companies. For
example, the foundry industry has
significant advantages from this
point of view and is rapidly developing now in export area.
In my opinion, the field of plastic parts is also a very fascinating
one, because lightening cars is the
highly regarded case these days
and, maybe with low expenses on
research and development, a very
profitable business in this area can
be made. As other metal resources,
I can mention magnesium. This is
one example of cases which need
expenses on research and development. Using magnesium instead of
usual metals can make a very profitable business in manufacturing
many parts. This metal can be used
in making steering wheel in cars and
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REPORT
experts think that it can be used in
the construction of the cylinder block
and cylinder head too. So, perhaps
the area of research and development can also be considered a suitable field for foreign participation.
How do you evaluate the capabilities of the Iranian Parts Manufacturers for the export purposes?
In past years, we’ve had a lot of
Parts manufacturers who exported
their products. Recently, according
to the domestic automakers’ demand
reduction and economic fields, many
Parts manufacturers have turned to
export their products. However, the
automotive industry has a relatively long history in Iran and many of
Parts manufacturers are of acceptable quality standards. It is a fact
that exports and international markets have their own challenges and
many strong competitors should be
surpassed. But, from the qualitative
view, which seems the main issue of
your question, it should be said that
the Iranian Parts manufacturers are
at an acceptable rank.
All parts of the France Peugeot
Company (PSA) which are produced
in Iran have enjoyed European
standards and consequently the international standards.
For example Peugeot 206 which is
sold in many agents in other countries is only produced in Iran. Also,
companies like VALEO in France
purchase from Iranian Parts manufacturers. But in terms of business
processes, I think that marketing is
not properly done for Iranian Parts
manufacturers and systematic solutions have not been provided for
these processes. It seems that a lot
of work in this field is to be done. In
the field of auto parts, we can also
refer to neighboring markets. CIS
and Arabic countries in the Persian
Gulf region countries are good markets. Turkey has also a good market and from exportation view it can
be seen as a threshold for entering
into the European markets. Iraq has
a growing market. Today, it is not
very difficult to enter this market, but
keeping the Iraqi market needs a
careful planning and monitoring.
76
Considering the fact that the foreign investment is a significant element for the industry, you think
in which sector we can have this
potential?
As far as I know, there are facilities and equipment for foreign cooperation in different fields of Parts
production in free trade areas and
industrial and special foreign investment fields. In metal or plastic parts,
High tech or electronic components
many activities can be done. Customs duties on these components
will be much less if they be imported
in CKD and then be assembled in
Iran. In the software areas, we can
also use the internal abilities. Today,
the wages of software programmers
in Iran is lower than its international
norm. However, these products are
sold at higher prices than other products.
much work can be done. Even in areas of power electronics and power
control, in my opinion, we are able
to take advantage of foreign investment. However, many factors can be
used to assess the type of activity.
For example, components such as
cylinder block or cylinder head that
has a lot of weight are better to be
localized. Since the transportation
costs of these partrs are high, local
manufacturing will bring more benefits and advantages. Moreover, in
the areas of low cost and availability
of raw materials is in Iran, foreign investment can also be used.
In relation to this question, I can
mention the energy costs. Despite
the rise in energy prices in recent
years which was performed with the
aim of eliminating government’s subsidies, still the energy cost in Iran is
much lower than many other countries. Thus, the manufacturing processes which are dependent on energy are more efficient and profitable
in Iran. In addition, in the areas of
8- In your opinion and based on
your experience in this industry,
is it better to have joint ventures
or foreign direct investment?
I think this question should be answered case by case. We can mention 4 important factors: Laws of the
source country, the type of work and
production, the capital stock depending on the market and the purpose. However, more than 15 million
vehicles are in use in Iran which is
a good market for spare parts. Although automobile production has
dropped due to the recent problems,
the potential production capacity of
two million cars a year is still available. This is a generating market for
the output of each car will bring its
spare parts market. For example,
consider bumper part. With each produced car, a large number of bumpers are required. Moreover, bumper
is one of the high consumption parts
which are highly demanded in the
market. Since bumper is Bulk volume, the cost of shipping this item is
REPORT
high. On the other hand, polymeric
materials are available and cheap in
Iran. Thus, this piece is in very good
investment.
As I said before, there are now
companies in Iran which are established with a significant capital and
are producing by the best European
technologies, but are in demand of
new capitals for development. So,
they are good opportunities for investment. By analyzing the parts
manufacturing companies, we conclude that Parts making is actually a
specialized field. Consequently, the
role of technology in comparison to
that of investment is highlighted. So,
joint venture is assessed as a better
solution rather than the direct investments. Iran is still not a member of
the WTO and indigenous procedures
are working alongside the regularized ones in trade domain. Although
techniques and technical services
are purchasable, a foreign investor
may prefer JV. Since the Iranian part
is more familiar with the business situations in Iran, he can play a better
role as guarantee for success. There
are many advantages in terms of
domestic JV. Because, domestic
resources are also being used in
the JV and it pleasantly affects the
economic boom. In addition, a part
of the net benefits will be used as resources in the country again.
Do foreigners get any benefit
from their presence in Iran’s Parts
manufacturing industry?
Foreign Parts construction companies have always had a positive
outlook on Iran’s market. European
and Chinese companies who have
currently had a significant presence
in Parts making area are greatly
desired to enter the Iranian market.
Moreover, many advanced Parts
manufacturing companies have
been established in Iran whose
techniques are fairly attractive to the
Chinese Parts manufacturers and it
can be a good ground of cooperation. Chinese companies want to enter the OEM and auto manufacture
market in Iran and have a greater
incentive to cooperate in this area.
For example, in past years in col-
laboration with European companies, an advanced production line
for producing Bearing Shell was
established in Iran. Products of this
company can pass the best international standards and test equipment
in its laboratories is absolutely efficient and helpful. But in recent years
due to lack of capital it was not able
to develop further and it can be a
field for foreign participation. However, Iran is a good market for Parts
manufacturers and, because of labor, raw material and energy costs, it
is a suitable base for production. So,
from different points of view, Parts
manufacturing industry in Iran can
be attractive to foreign companies.
Is the Parts Manufacturing Industry of Iran affected by the foreign
countries sanctions?
As I mentioned previously, sanction is one ring in the chain of Parts
manufacturers’ problems and it
shouldn’t be considered in isolation.
However, industry’s condition has
suffered a crisis in recent years that
has certainly damaged this industry.
Besides, the resultant conditions
are difficulties in purchasing foreign
raw materials and shipment to the
country and cutting ties with Iranian
companies by foreign countries. In
addition, energy price increases,
reduction in people’s purchasing
power and weakened power of our
money (RLS) in comparison to others are all factors that have affected
Parts manufacturing industry in Iran.
However, passing the previous conditions and entering into a new situation in which the transaction can be
resumed will be a great opportunity,
an opportunity of creating new businesses and development in Parts
manufacturing industry. It should
be noted that improvement in conditions is a gradual process which
takes time to adjust to the tense foreign policy. Exchanges will expand
gradually as well.
Is there any foreign investor in
this industry now? If yes, from
which countries?
As far as I know, there are foreign investors from countries like
India, Taiwan, China, etc. who are
investing in this industry. There are
also some companies with foreign
origin who are in direct partnership
with Iranian companies and have
invested in Iran. For example, in a
production company, the Iranian part
purchases a part of the foreign company’s share in the source company,
and the foreign company purchases
a part of the domestic company’s
share. Some foreign investments
are made up of capitals belonging
to some Iranians who had migrated
to European countries or the United
States, but are still investing and
working in Iran. However, this group,
within the investment attractions
abroad, is still willing to do business
in Iran.
In the third case, the Iranian company and the foreign company share
to produce specific products for the
local Iranian market. Regarding
sanctions on Iran and preventions
from sending some raw material to
Iran, it is a good solution; because
the foreign part can play a role other
than financing and will provide raw
and semi-processed materials. For
example, the Seal Ring is a good
example in this regard. Some of
the silicon and polymeric materials
used in this piece has also military
applications. Thus, providing its raw
materials in bulk is difficult to Iranian
companies. But, presence of a seal
Ring manufacturer and supply of raw
materials indirectly by that Company
(rather than supplying it from PTFE
manufacturers) is possible.
These are the things that I know.
Parts manufacturing companies
from Taiwan, Turkey and China have
participated in Iran’s Parts manufacturing industry in these ways. In
recent years, there were proposals
from France, Germany, Britain and
Italy but unfortunately they have remained at the preliminaries of cooperation and transaction; recent sanctions have stopped them too. We
hope that the change of government
and the available potentials provide
us with a better viewpoint from Parts
manufacturing industry in Iran.
77
The specifications of
Iraniancars
car engines
Iranian
engines
78
ARTICLE
ngine production in Iranian car manufacturing factories was first realized about one decade ago in the nation’s car industry and thereby
the domestic factories tended toward the more advanced car production.
Some collaborations were put in action with reputable nations in this filed
simultaneously with the commencement of National Engine production in Iran
and this trend led to fully-specialized production. Of course, some engines
were also manufactured which are originally the previously-assembled ones
with some optimizations. Other commonly used engines are also assembled.
In the next sections, this paper describes the specifications and features of
some most commonly used engines in Iran.
E
Iran Khodro’s family of National Engines
The family of National Engines can be an appropriate option for Iran
Khodro’s future cars. Substitution of EF7 engine for XU family of engines is
among the next plans of this company.
This turbocharged engine can produce up to 150 hp. Firstly designed based
on CNG fuel, this engine has been also designed based on gasoline fuel in
its newer model.
The mass production of 1.7-L National Engine, the first among this family,
has been commenced. However, the production of this advanced engine,
perhaps the most advanced engine produced by Iran Khodro, was postponed
several times.
This engine features low emission (Euro 4 standard), high durability and an
advanced smart “brain” and can produce 110 hp and 98 hp in gasoline and
CNG modes, respectively. It can travel up to 300 km with CNG mode while
the current CNG cars travel 120-200 km.
This advanced engine has an engine displacement equal to 1.7 L and features the Variable Valve Timing (VVT) system which enhances the engine efficiency. This engine receives the lowest damage in CNG mode with respect
to other internal combustion engines.
Another engine from the family of National Engines is the turbocharged
national engine which feeds additional air into engine and hence produces
155 hp in both CNG and gasoline modes.
Regarding this point that Iran is a high-altitude country, about 13 per cent of
engine power is lost in average. The turbocharger which feeds additional air
into the engine can resolve this problem to some extent. This engine is said
to be mounted on Iran Khodro (IKCO) Soren ELX in 2011.
The design of 1.4-L engine from the family of National Engines is also finished and is under tests. But, the main issue about this low-displacement and
cheap engine is the lack of clarifications about the desired car which hosts it.
Iran Khodro (IKCO) can mount it on Rana, but cannot mount it on Peugeot
206 or Tondar 90 (Renault L90) because of disagreement from foreign partners. This engine has an engine displacement of 1397 mL and produces 95
hp and 84 hp in gasoline and CNG modes, respectively. The engine torque
is 125 N.m (in 4500 rpm) and 111 N.m (in 4500 rpm) in gasoline and CNG
modes, respectively. This engine’s compression ratio is 11:1.
These three engines have been designed with the participation from RWTH
Aachen University, Germany.
• Engine type: EF7(NA)
• Engine displacement: 1648 Ml (4 cylinders)
• Compression ratio: 11:1
• Engine power at 6000 rpm: 113 hp (gasoline mode), 103 hp (CNG mode)
• Max. torque at 4500 rpm: 155 N.m (gasoline mode), 136 N.m (CNG mode)
• Fuel Injection system: Sequential (multi-point) Fuel Injection (SFI)
• Fuel type: compressed national gas(CNG), alternative fuel: RON95 unleaded gasoline
• The number of valves: 16
79
ARTICLE
• Velocity: 189 km/h (gasoline mode), 181 km/h (CNG
mode)
• Power transmission system: BE3/5 gearbox, PreDamper, single-plate dry friction mechanical clutch, Differential type: Pinion Crownwheel: location: front
EF7 Diesel Engine
Iran Khodro’s New Diesel Engine
Diesel engine is an appropriate option during lack of
gasoline, especially because of lower price or diesel
fuel with respect to gasoline. Many restrictions should
be handled in Iran for supplying the diesel engine because of lack of diesel cars. Of course, a new engine is
under design in IKCO named EFD Diesel Engine. Having designed EF7 National Engine with the participation
from FEV Company (Germany) and 1.4L turbocharged
National Engine from the family of National Engine, the
diesel engine is the fourth one which is designed based
on EF7 engine. This engine (EFD) has been designed
with the participation from a German engine engineering
company which is a subsidiary of AVL Company (Austria). The cylinder bore has been decreased in this engine so that its engine displacement has reached 1.5L.
This engine produces 120 hp; namely the engine power
would increase about 10 hp and the fuel consumption
would decrease by 25% when the engine displacement
decreases about 200 mL.
The reason behind the power increase is the highpressure system, diesel spray and powerful turbocharger and the reason behind the lower fuel consumption is
the higher efficiency of diesel engines with respect to
gasoline counterparts. The torque produced by the engine is a symbol of its high power and is about 100 N.m
more than the 1.7L gasoline engine; namely, the torque
would increase about 100 N.m when the engine displacement decreases about 200 mL.
It should be checked how would be the engine performance in real conditions but based on the available
information it would be the best option for purchasing
if it is mounted on a car because it would have more
power torque and power despite its lower fuel consumption and emission. The direct injection fuel system with
high-pressure multi-point system has been considered
for this engine. Moreover, this engine features spark
plug preheating, Variable-geometry turbocharger (VGT)
and air intercooler.
This product is equipped with exhaust gas recirculation system (EGR) and intercooler and the set of these
advanced and new parts have led to a more difficult production in Iran.
Regarding the current trend, it is estimated that over
half the engine parts should be imported for engine production, but it is predicted that the engine production
would last more than 3 years. However, the EF7 engine
won’t be the only diesel engine mounted on passenger
cars because it is said that the PEUGEOT engines would
be also used for diesel passenger cars. The PEUGEOT
206 engine is among them.
80
TU3 Engine
This engine is currently used on PEUGEOT 206 and
some parts are manufactured in Iran. It may be weaker
than TU5 engine but it has lower fuel consumption. Definitely, the lesser number of valves is among its weakness points. The torque produced by this engine is also
about 30 N.m less than that of TU5 engine which results
in weaker performance.
• Engine displacement: 1360 cc , 4 cylinders, compression ratio: 10.2:1
• Engine power at 5500 rpm: 75 hp, Max. torque at
3400 rpm: 111 N.m
• Fuel Injection system: multi-point with electronic injection
• Fuel type: RON 91 gasoline
• The number of valves: 8
• Combustion system: spark plug internal combustion
• Emission limit standard: Euro II
• Fuel system: Injection type with exhaust catalyst and
oxygen sensor
• 0-100 acceleration: 14.1 seconds
• Manual gearbox named MA5N, single plate dry friction mechanical clutch, location of Differential: front
SAIPA Tiba’s engine
Tiba
The design team from RWTH Aachen University (Germany) increased the engine displacement of SAIPA
Pride up to 1500 cc and by increasing the compression
ratio up to 9.7:1 the engine power has reached 80 hp.
Based on the announcement of Megamotor Company,
the manufacturer of engine drives for SAIPA Company,
the fuel consumption of this engine is 8% lower than that
of SAIPA Pride.
Megamotor Co. has increased the engine displacement with the aid of German FEV Company and has
increased the compression ratio up to 9.7 (the previous ratio was 8.5). With regard to gearbox, a member
of SAIPA’s Research Center explains that the gear ratio
of SAIPA Pride has been changed based on the new car
and engine.
It is said that the fuel consumption of this car is 10%
lower than that of SAIPA Pride. So this engine is a better choice with respect to Pride’s engine. It is also one
of the cheapest Iranian engines is this class. The torque
produced by this engine has also been enhanced from
103 N.m to 124 N.m.
The gearbox of SAIPA Pride cannot withstand the high
torque produced by this engine. Hence, in new Tiba passenger car, the gearbox was reinforced in gear 2 in order
to withstand the high torque. The clutch of SAIPA Pride
has also undergone some changes in order to be used
in Tiba among them one can mention the more stiffness
of clutch disk in order to withstand the 124 N.m-torque
produced by the new engine. On the other hand, the
spline shafts at the end of the wheel hubs were also reinforced because of higher engine power.
Participation of Iran Chamber
of Commerce, Industries, Mines and
Agriculture in Qinghai International
Halal Fair
81
Based upon the invitation made by China
Council for the Promotion of International Trade
(CCPIT) Qinghai-Sub Council and coordination
of Iran Embassy in Beijing, representatives of
International Affairs Dept. of Iran Chamber of
Commerce, Industries, Mines and Agriculture
participated in Qinghai International Halal Fairs
2013 on April 29-May 4, 2013 in Xining, Qinghai
Province.
The aim to organize Iran Chamber booth in
the above-mentioned fair was to introduce the
potentials, capabilities and capacities of Iran
Chamber members, as well as that of Iran
Chamber affiliated union, associations and trade
societies.
In this visit, Mrs. Assadi, expert for international affairs met and held talks with the governor
and vice governor of the province; Chairman,
secretary General and director for International
Affairs of CCPIT-Qinghai Sub-Council, Chair-
82
man of CCPIT-Xinjiang Sub-Council, Chairman
of Macao Chamber of Commerce and other officials of the country.
In her statements in the seminar on “Trade
and Economic Cooperation Between China and
Islamic Countries”, Mrs. Assadi introduced Iran
Chamber of Commerce and its responsibilities
and touched upon the importance of this organization as the consultant to the three Executive,
Legislative and Judiciary branches of the government, which plays a key role in the decisionmaking sources of the country.
It is deemed necessary to mention that in
presence of a huge number of officials including
the vice governor, director for economic commission and director for trade commission of the
province, a Memorandum of Understanding was
signed between Iran Chamber of Commerce
and CCPIT-Qinghai Sub-Council.
On 3 June the ICC Working Group
on Digital Media heard an update
on mobile marketing developments
from Genie Barton of the US self-regulatory body and Digital Advertising
Alliance (DAA). Ms Barton explained
the state of US efforts to draft rules
for self-regulation of mobile marketing, expanding on the DAA’s existing
schemes for online behavioural advertising (OBA) and multi-site data
sharing. Scott Meyer, Chief Executive Officer of Evidon, demonstrated
how existing digital rules are put into
self-regulation practice through the
technical mechanisms his company
has developed and introduced their
solutions for the aspects unique to
mobile marketing.
The working group deliberated
global needs – as identified by members and national committees across
all regions – and will begin framing
an outline for a guidance tool on
mobile that can offer a consistent
approach to self-regulation across
all markets. ICC guidance will take
inspiration from the industry consensus on mobile, when the DAA’s work
is published, but any further rules on
mobile for global consumption will be
based on the ICC OBA framework
published in the Consolidated ICC
Code of Advertising and Marketing
Communications Practice in 2011.
On 4 June, in the commission
meeting, responsible practice on
digital media remained a key topic as
Marc Groman, Executive Director of
Network Advertising Initiative (NAI)
briefed members on their unique
approach to self-regulate third party
online advertising and shared developments on the company’s new mobile rules.
Following that, Garrett Bechler,
Senior Principal Security Architect
and Strategist from Symantec Corporation, gave members the low
down on cyber security evolvement,
explaining how the advertising sector is affected by current threats and
what companies can and should be
doing to protect consumers’ trust
and the integrity of digital advertising.
In addition to digital media, members discussed current developments in the drafting of a companion
code for responsible marketing of
beverage alcohol as well as an update on activities to promote awareness and use of the Consolidated
ICC Code of Advertising and Marketing and Communications Practice
through APEC.
ICC Chairman elect, Harold
McGraw III, Chairman, President
and CEO of McGraw-Hill Financial,
made a guest appearance at the
meeting to share his vision for ICC
and to present the ICC Merchant
of Peace award to John Manfredi,
long-serving former Chair of the ICC
Marketing and Advertising Commission, in recognition of his significant
contribution to advancing ICC’s mission to promote peace and prosperity through international trade and
investment.
Digital advertising
tops agenda of responsible
marketing experts meeting
Ensuring trust in digital media practice and the
need for a set of global dos and don’ts for mobile
marketing were among the key discussions at the biannual meeting of the ICC Commission on Marketing
held on 3-4 June at the News Corporation offices in
New York. The meeting agenda featured a roster of
high calibre speakers, most notably ICC Chairmanelect Harold McGraw III, Chairman, President and
CEO of McGraw-Hill Financial, who shared his views
on ICC policy work and positioning.
83
REPORT
Tabriz:
One of Iran’s most
Attractive Cities
84
REPORT
T
abriz is the capital of East
Azerbaijan province, in the
Azerbaijan region of Iran. It
is an ancient city with a history going back about 4,500 years.
Archeologists have found evidence
for this in digs near the Blue Mosque.
Provincial capital of Eastern
Azarbaijan, it is 310 km southeast of
Bazargan (Iran- Turkey frontier); 159
km south of Jolfa on Iran-Azarbaijan
Republic border, and can be reached
by good road; rail (742 km from Tehran, with connections to Europe and
Moscow), and air from Tehran, Istanbul and other major cities.
Geography
Situated at an altitude of 1,340 meters above sea level, 619 km northwest of Tehran, the second largest
city in Iran until the late 1960’s and
one of its former capitals ( with a
population of 1,400,000 according to
1992 census), Tabriz is in a valley to
the north of the long ridge of Mount
Sahand. The valley opens out into a
plain that slopes down gently to the
northern end of Lake Orumieh, 60
km to the west. The 160-km long Aji
,Chai or Talkheh River is the major
river of the city, formed by merging
of three smaller rivers, namely the Ab
85
REPORT
Nahand, Quri Chai, and Ojan Chai,
all of which originate from the Sabalan Mountain and the heights in the
southeastern part of the town. The
river and streams join the Orumieh
Lake after passing through the valleys between the Sorkhband and
Yekkeh Chin mountain north of Tabriz and Osku district. Mehran River
or Maidan Chai, also called Liqvan
River, originates from the peaks between Karim and Sultan mountains
overlooking the Liqvan village (a:
major center of cheese production in
Iran) near Esparakhoun and Qeshlaq. Its worst natural disadvantage,
however, is its vulnerability to earthquakes, one of which utterly destroyed the city in 858. Rebuilt in a
minor key, it was again devastated in
1041, when more than 40,000 people lost their lives.
believed to date back” to distant
antiquity, perhaps even before the
Sassanian era (224-651 AD). The
oldest stone tablet with a reference
to Tabriz is that of Sargon II, the Assyrian King. The tablet referrers to a
place called Tauri Castle and Tarmkis. The historians believe that this
castle was situated on the site of
the present Tabriz. It was the capital
of Azarbin the 3rd century AD and
again under the Mongol Ilkhanid
dynasty (1256-13 53), although for
some time Maragheh supplanted it.
During the reign of Aqa Khan of the
Ilkhanids, as well as under the reign
of Ghazan Khan, Tabriz reached
the peak of 1 glory and importance.
Many great artists and philosophers
from all over the world traveled to
Tabriz. During this same period 1
Khajeh Rashid od-Din Fazlollah, the
i..: learned historian and Minister
of Ghazan , Khan, built the famous
Rob’e Rashidi center. In 1392, after
the end of Mongol rule, the town was
sacked by Tamerlane. It was soon
restored under the Turkman tribe of
r the Qara Qoyunlu, who established
a short-lived local dynasty. Under
the Safavids it rose from regional to
national capital for a short period,
but the second of the Safavid kings,
Shah Tahmasb, moved the capital
to Qazvin because of the vulnerability of Tabriz to Ottoman attacks.
The town then went into a period of
decline, fought over by the Iranians,
Ottomans and Russians and struck
by earthquake and disease.
Tabriz was the residence of the
crown prince under the Qajar kings,
themselves of Turkish stock, but the
town did not return to prosperity until
the second half of the 19th century
.The greatest boost to Tabriz came
with the opening up of Persia to the
West at the turn of this century, when
it became the main staging post between the interior of Iran and the
Black Sea and, for a short time, the
economic capital. In 1908 it was the
center of a revolt against Mohammad Ali Shah, which was only put
down with the brutal intervention of
the Russians.
In the second Irano-Russian War
the city was occupied by the Czar
troops. However, it was returned
to Iran following the signing of
Turkmanchai Treaty, a peace and
trade settlement that ended the Ira-
Climate
By virtue of its situation, Tabriz has
an agreeable summer climate, but
the cold in winter is severe. Altogether, it has a continental climate with
low humidity. The average annual
rainfall is 288 mm.
History
The town has a long and checkered history: Although the early history of Tabriz is shrouded in legend
and mystery, the town’s origins are
86
REPORT
no- Russian War of 1826-1828. The
Iranian Constitutional Revolution
originated in Tabriz and culminated
during the reign of Mohammad Ali
Shah of Qajar dynasty (1779-1925).
Sat tar Khan and Baqer Khan were
the two most prominent leading figures behind the movement. Tabriz
was occupied by Russians several
times in the first half of this century,
including most of both world wars.
A railway line to the border at Jolfa,
built by the expansionist Russians,
was of little importance until recently,
but it has increased in significance in
the ‘90s as a result of Iran’s friendlier
relations with its northern neighbors.
With a very rich history, Tabriz
used to house many historical
monuments. Unfortunately, many
of them were destroyed in repeated invasions and attacks of foreign
forces, negligence of the ruling governments, as well natural disasters
such as earthquakes and floods.
What remains now mostly dates
back to the Ilkhanids, the Safavids,
and the Qajars. Some of the monuments are unrivaled masterpieces of
architecture. The Shahrdari Square
is the center of the town, on the
south-west of which stands the imposing edifice of Municipality. The
railway station (5 km from the center
of the town) is at the western edge
of the town. The Quri Chai river runs
through Tabriz, and most places of
interest to the visitor are to the south
of this river and alone or north of
Imam Khomeini Avenue.
- El Goli (formerly Shah Goli) A superb park around a square artificial
pond. In the center, a small hall is
on an island and hosts a restaurant.
Very nice for eating some tchelokebab or sip some tea while enjoying
the freshness of the park in summer.
- Blue Mosque Originally built in
1465, this mosque which was once
certainly superb, but was severely
damaged in an earthquake in 1778,
leaving only the entrance Iwan. It
was reconstructed at early 1900 by
the Iranian Ministry of Culture. The
inside of the mosque is tiled with
superb blue ceramic, unfortunately,
many pieces went missing during
the quake and were simply replaced
by painting instead of tiles - some of
the original tiles can be found around
the entrance.
- The Bazaar of Tabriz is one of the
oldest bazaars of the Middle East
and the largest covered bazar in
the world. It was inscribed as World
Heritage Site by UNESCO in July
2010. Tabriz has been a place of cultural exchange since antiquity and
its historic bazaar complex is one
of the most important commercial
centres on the Silk Road. Located in
the center of the city of Tabriz, Iran,
this spectacular structure consists of
several sub-bazaars, such as Amir
Bazaar (for gold and jewelry), Mozzafarieh (a carpet bazaar), a shoe
bazaar, and many other ones for
various goods. The most prosperous
time of Tabriz and it’s bazaar was
in 13th century when town became
the capital city of Safavid kingdom.
The city lost it’s status as capital
in 16th century, but it’s bazaar has
been being important as a commercial and economic center. Although,
numerous modern shops and malls
have been established nowadays,
the bazaar of Tabriz has remained
economic heart of both the city and
northwestern of Iran. It is worthy of
mention that Tabriz bazaar has been
being an important political place,
and one can point out its importance
in the Iranian Constitutional Revolution in the last century and Islamic
Revolution in the contemporary time.
- Ark-e-Alishah also known as Arg
e Tabriz, is a remnant of a fortress
built in the Ilkhanate period. Currently it was located in the center of
Tabriz. Historians believe that it was
used as a military castle but clerics
claim that the structure was initially
used as a mosque in its early days.
After the Revolution, large parts of
the building were destroyed by the
clerics to prepare a new place for
Friday prayers in Tabriz. The structure today stands 28 meters high,
and is still used as part of a space
for holding Friday prayers.
- Constitution house a house retracing the story of the Iranian constitutional revolution in the early 20th
century, Tabriz being a high place
of the uprising. Quite well documented and well kept, although few
English translations are available.
The edifice is located next to the
Tabriz grand bazaar, on Motahari
Ave. During the years leading up to
the Constitutional Revolution and
afterwards, the house was used as
the gathering place of the leaders,
activists, and the sympathizers of
the movement, among them Sattar
Khan, Baqer Khan, Seqat ol-Eslam
and Haji Mirza AqaFarshi. The twostory building was constructed in
1868 by Haj Vali Me’mar-e Tabrizi. It
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REPORT
has numerous rooms and halls. The
most beautiful parts of the house are
a skylight and a corridor decorated
with colorful glasses and mirrors.
- Bazaar one of the most beautiful and largest in Iran and world.
Some parts have been renovated
and are truly wonderful. You will find
mosques, bid selling halls, and all
kind of trades possible. Worth to get
lost inside for a few hours.
- Azerbaijan Museum a good place
encompassing the long Iranian history. But poorly kept: very few translations and erratic classification
make the trip inside the numerous
dynasties intricate for first timers.
There are also numerous places
to see around Tabriz. The mountainous region of south Azerbaijan offers
breathtaking views and excellent
treks among castles, rocky paths
and remote villages.
• Orumyeh Lake a salted lake
with salt beaches and improbable
bathing spots (gender separate, of
course). Numerous migratory birds
stop there on their long trip for some
rest and food.
• Babak Castle breathtaking castle, nested on a rocky peak at an
altitude of 2,700 m. Babak was apparently one of the last Zoroastrian
heroes fighting the Islamic invasion,
1400 years ago. A 2-hours walk to
get up there, but definitely worth it.
What a view!
• Kandovan a troglodytic village 2
hours away from Tabriz. Great for
discovering both the odd beauty of
the place and the daily life of an Iranian village, among sheep, donkeys,
hens and cats... Women in printed
chadors can go outside and playing
kids are all around. Mullahs obviously don’t bother going there too often.
Resistant walking shoes are mandatory if you want to climb up the
village. A living example of human
adaptation to exceptionally unusual
natural surroundings, Kandovan village is located 50 km to the south of
Tabriz, Osku, on the northern slopes
of a valley at the foothills of Mount
Sahand. A river originating from the
Sahand peaks passes through the
valley. There are a number of natural
springs to the north of the river, the
88
water from which has traditionally
been used for the treatment of kidney stones, according to the locals.
The physical structure of the village
looks like images from fairy tales.
Natural cones, scattered over a vast
area, serve as human dwellings on
rock formations which themselves
seem to have been the work certain sculptors. The road from Tabriz
goes through this natural artwork.
On getting nearer to the dwellings,
the visitor finds out that large families are living inside two or three of
these hollow interconnected cones
with features such as openings on
their surface playing the role of actual windows. The lowest cones are
used as stables and those on top as
the living quarters.
The interiors of the dwellings, usually divided into a living and a bed
room, are dimly lit; however, the villagers are used to it. The interconnecting corridors are very narrow.
From the outside, the dwellings look
so similar to each other that one may
easily get lost in the village. Steep
pathways and steps are made of
rock pieces for animals as well as
human beings. As the legend goes,
the first people to settle here were
the soldiers involved in military operations nearly 800 years ago, who
found the cones by chance and used
them as their temporary camouflage
and accommodation. However,
among archaeologists, it is considered to be of Pre-Islamic Period.
• Mount Sahand big dome topping at around 3,700 m. Interesting
to climb in summer, or for skying in
winter (1 lift available, another in
project)
• Rob-e-RashidiThis complex was
built 700 years ago. This place was
a place that they do all surgeries
in there. The books were made of
leather. They teach science in there.
• Gholestan Garden Is good place
to relax under the shadows of trees.
• Tabriz Art Museum Is the first art
museum in Asia and Iran and the
fifth in the world.
• Poets Tomb Also known as
Maghbarato-Shora many poets are
buried here, as well as Shahriyar.
• Canonical palace This beautiful
palace was built approximately 60
years ago.
If you have (lots of) money, the
Tabrizi carpets are among the finest
in the world, and you will find masterpieces in shops and inside the
Bazaar. Tabrizi rugs are among the
most decorative rugs and frequently
use colors like pink, red and cream.
The fifth Iran-Bangladesh joint economic commission session
The Handicraft Workgroup Meeting on Handicraft Export to Egypt
Iran & Turkey, Increase of mutual trade to $30bln by 2015
Lebanese Trade Delegation and Iranian Tradespeople’s Meeting
Vietnam keen to expand trade ties with Iran
Emphasis on the expansion of bilateral ties between Iran chamber of Commerce
and Japan
The Meeting of HE Mr. Abadir Hassan, Acting Commercial Attaché, Somali
Embassy, Tehran With Mr. Farahzadi, Exports, Pars Darou
The Meeting of the Tunisian Delegation with ICCIMA International Affairs
Deputy
Iranian and Egyptian Tradespeople’s Meeting
The Joint Seminar of the ICCIMA Delegation and Polish Businesspeople at the
Polish Chamber of Commerce
A Closer Look at China-Iran Relations
Iran – Thailand to boost trade turnover
Seminar for Introduction to the Regulations for Export to Iraq
The Conference of the Economic Delegation of the Confederation of West
Africa with Iranian Businesspeople
The Meeting of the ICCIMA Delegation with the President of Radomsko
Chamber and Radomsko Businesspeople
The Meeting of the Polish Deputy Minister of Economy and the ICCIMA
President
89
NEWS
The fifth Iran-Bangladesh joint economic
commission session
According to the report of ICCIM’s international department, Iranian Minister of Industry, Mines and Trade
Mehdi Qazanfari and Chairman of the Federation of
Bangladesh Chamber of Commerce, Kazi Akrameddin
Ahmed, in a meeting in Dhaka underlined the need for
the further expansion of the bilateral ties and bilateral
cooperation, trade relations in particular.
During the meeting held in the Dhaka on Monday,
Qazanfari and Ahmed explored avenues for bolstering
and reinvigorating bilateral ties between Iran and Bangladesh, especially in trade field.
During the meeting, Qazanfari pointed to the current
status of trade exchanges between Iran and Bangla-
desh, and said, “Indirect trade imposes further expanses on both sides.”
Ahmed, for his part, said that Bangladesh is willing to
broaden its trade ties with Iran.
“Private sectors play a crucial role in promoting mutual trade cooperation,” the Bangladeshi trade official
said.
Ahmed expressed the hope that the current $101bln
worth of mutual trade cooperation would increase
through exchange of delegations and holding exhibitions.
The Iranian minister called for the establishment of
an expert group for pursuing the implementation of the
agreements made at the two countries’ Fifth Joint Economic Commission meeting.
He also voiced Iran’s preparedness to export technical and engineering services to Bangladesh.
Bangladesh’s Prime Minister, for her part, welcomed
Iran’s proposals and called on the expert teams to pursue implementation of the agreements.
The ceremony was held on the sidelines of the two
countries’ economic commission meeting and was attended by Qazanfari and Bangladeshi Finance Minister
Abul Maal Abdul Muhith.
The Handicraft Workgroup Meeting
on Handicraft Export to Egypt
A handicraft workgroup meeting was held on the third
floor of the ICCIMA building, participated in by government officials, private sector representatives, the head
of Iran’s Interest Section in Cairo, Mr. Miraboutalebi,
and the expert at the Egypt Desk of the African-Arab
Region.
This meeting investigated the ways of entry into the
Egyptian market, and it was decided that considering
the short time available, the administrative committee
make their proposal about participation in the Cairo
Carpet and Handicraft Exhibition, to be held this June.
Mr. Miraboutalebi commented that ICCIMA will be
cooperating with the Egyptian representation in Iran
to facilitate the participation in the Egyptian market of
Iranian tradespeople in these fields. He proposed that
representatives from the handicraft industry accompany the second tourism delegation, which is leaving for
Egypt on May 10, 2013.
90
HE Mr. Amani, the Head of the Interest Section of Iran
in Cairo, referring to the Egyptian people’s interest in
Iran, said that the several exhibitions held over the past
few years are witness to this interest. He added that
some of the Egyptian handicrafts, such as lanterns, are
made in different types in China, and are abundant in
the Egyptian market. However, those handicrafts the
production of which is not industrially possible can be a
good starting point for Iranian tradespeople and craftspeople.
It was finally decided that an invitation be prepared
and sent to Egypt Chamber of Commerce and Egyptian
officials for the Handicrafts Week and the Exhibition of
Egyptian Handicrafts in Iran.
It was also decided that as June 10, 2013, the Handicrafts Day, is accompanied by an exhibition in Tehran,
Egyptian tradespeople, artists and craftspeople and
other interested people be invited to visit the exhibition.
NEWS
Iran & Turkey, Increase of mutual trade to
$30bln by 2015
According to the report of ICCIM’s international department, the joint meeting of Iranian and Turkish businessmen was held with the presence of Iran chamber’s
president, minister of industry, mines, trade, Iranian
vice-president for international affairs, head of trade
promotion organization and Turkish minister of development and planning on 27 April in permanent exhibition in Tehran.
Stating that the bilateral trade has the stable growth;
Mohammad Nahavandian the president of private sector parliament said: “the increasing of two countries’
economic transactions is not limited to trade and it includes other economic areas such as: joint venture.”
“The joint ventures create the common interests
which will significantly help to the stability of relations”,
He continued:
Emphasizing that the countries should prepare themselves for the situation after sanctions, Nahavandian
stated:” in near future, the new conditions will form in
Iran’s economic relations with other countries. Certainly the countries which have trade relations with Iran
under sanctions will be in priority of economic relations
after sanctions.”
“The joint chambers and councils of Iran and Turkey
should collect and approve a plan for developing cooperation between two countries.”
Pointing to the various capacities of Iran and Turkey,
he said: “ECO, D8, ICC and Islamic chamber are the
capacities that Iran and Turkey can develop their economic ties with using them. If Iran and Turkey come
together, they will find higher power in the global economy.”
The president of private sector parliament outlined
that the removing of trade obstacles is a necessary element for developing relations between Iran and Turkey.
“ in the last year the value of trade between Iran and
Turkey was more than 22 billion dollars which was allocated 10 billion dollars for Turkish exports to Iran and
12 billion dollars for Iranian exports to Turkey”, Cevdet
Yilmaz, Turkish Minister of Development has said.
Cevdet Yilmaz emphasized on the improvement of
trade tariffs, the development of free trade between two
countries and joint ventures for expanding economic
relations between Iran and Turkey.
The two countries officials stressed the necessity for
stronger relations and pursuing the planned increase of
bilateral trade to $30bln by 2015.
Lebanese Trade Delegation and Iranian
Tradespeople’s Meeting
This meeting, which was held on Thursday, April 27,
2013, was attended by the Head of Exports of Mapna
Company, and representatives from Farab, Toos-Niroo,
Shayan Marmarit, Estahban Shimi, Petro Pars, Fulman, Speed Age, and Seadolf companies, and also the
head of Yazd Chamber of Commerce, Industries, Mines
and Agriculture.
The meeting was chaired by Mr. Shafiei, the Head of
the Iranian side of the Joint Council. After the introductions and luncheon, the two sides engaged in discussions.
The tradespeople were divided into three groups:
chemicals and hygienic products, electricity and related
services, and petrochemical products, discussing the
corresponding topics in separate rooms.
In this meeting, fruitful discussions were held regarding the organization of the commodity market, the
Council’s services to members, and ways of entry into
the electricity and energy markets of Lebanon.
It was proposed that after making the necessary studies, the private sector produce electricity by light and
small-scale wind and water power plants. Later, this
can be increased to higher voltages.
As for stone glue, one of the Lebanese companies
present at the meeting had the factory for the production of this product. When Mr. Shafiei explained that
there were over 6000 stone factories in Iran and that
there was a huge demand for this product, Mr. Jaber
Jaber expressed his willingness to invest in Iran and
establish a factory in Iran.
Also, Estahban Shimi made an agreement with the
Lebanese side regarding the export of paraffin and industrial Vaseline to African countries, in view of the high
demand for these products there.
In view of his active interest in new energies and the
existence of a modern solar panel factory in Yazd, Mr.
Mohyeddin expressed his interest in visiting this province. It was also decided that the two tradespeople
present at the meeting, who worked in the fields of hotel industry and tourism, employ the tourist-recreation
centers in this province and use the mutual capacities
for cooperation.
91
NEWS
Vietnam keen to expand trade ties with Iran
According to the report of ICCIM’s international department, Mr. Mirabutalebi, Iran chamber’s deputy in
international affairs in a meeting with Vietnam s foreign
affair deputy said: “now, the volume of trade is not satisfactory despite of good relations between two countries and Iran chamber of commerce will welcome for
exchanging trade delegation and expanding trade delegation.”
In this regard, the establishment of a joint business
council between the two countries in various fields of
business and industry relationships will help to reach
the desired level.
“After visiting the Iranian president to this country is
expected to increase trade relations between two countries”, Vietnam s foreign affair deputy said.
In the end both sides were calling for more cooperation in joint venture and tourists.
Emphasis on the expansion
of bilateral ties between Iran chamber of
Commerce and Japan
According to the report of ICCIM’s international department, the meeting held between delegations of Fusion industrial & trade group of Japan and Iran chamber’s deputy in international affairs.
Mr. Mirabutalebi, Iran chamber’s deputy in international affairs said:”Unfortunately, the Japanese approach is
not appropriate in relation to economic cooperation and
Japanese companies have lost their position in Iranian
market and other countries have been replaced in the
market because of lack of proper functioning in spite of
insightful records in the past, Iran with its population of
400 million and neighboring countries can become a
hub for trade with Japan in the region “.
Japanese fusion group chairman, said: “Given the
historically good relations between Iran and Japan after
World War II economy, trade and economic cooperation with Iran are demanding.”
The Meeting of HE Mr. Abadir Hassan, Acting
Commercial Attaché, Somali Embassy, Tehran
With Mr. Farahzadi, Exports, Pars Darou
Following the correspondence and discussions with
the Somali Ambassador to Tehran regarding the export
of medicines to that country, the price and product lists
of Pars Darou Company were sent to the Somali Embassy, and three Somali companies with three separate
lists announced their demand for medicines. Therefore,
a meeting was held at 10:00 AM, Saturday, May 18,
2013, attended by the export official of Pars Daru Company and the Acting Commercial Attaché of the Somali
Embassy.
92
Mr. Abadir Hassan presented the lists of import demands of the three Somali companies to Mr. Farahzadi,
and explained that they did not, for example, just need
5000 packs of a certain type of tablets, and that the
lists were just the initial lists. He added that to avoid
foreign exchange transfer obstacles, the finances could
be arranged through the Somali Embassy, and delivery
could be FOB at Bandar Abbas. He said that Somalia
was on the reconstruction and development path and
that Turkish companies were mushrooming there, while
Somali people are interested in trade relationships with
Iran
NEWS
The Meeting of the Tunisian Delegation with
ICCIMA International Affairs Deputy
On Tuesday, April 30, 2013, the Tunisian delegation,
headed by Mr. Badr Al Din met with Mr. Miraboutalebi,
the deputy of ICCIMA International Affairs.
Mr. Badr Al Din, IKCO’s exclusive representative in
Tunisia, said that they managed to secure IKCO representation over the last two months, that so far agreements had been made for the export of Sarir, Runna,
Soren and Samand, and that six vehicles were to be
exported to Tunisia in the first phase of the cooperation. He also announced the agreement to export 500
vehicles to Tunisia per year.
It should be noted that a barter system, the import
of auto parts, olive oil and other products that Iran de-
manded in return for the export of vehicles to Tunisia
was a proposal made by ICCIMA last July on the sidelines of the 11th Joint Commission. The Proposal was
followed up by the announcement of interested tradespeople on both sides. The Tunisian delegation, emphasizing the practicality of the proposal, underlined the
significance of trade.
The proposal of establishing a joint business council,
previously made by ICCIMA, was welcome by the Tunisian side at this meeting, and it was decided that a list
of tradespeople be sent to ICCIMA by Tunisia Chamber
of Commerce and Handicrafts, and that the names of
the founders be exchanged.
Iranian and Egyptian Tradespeople’s Meeting
In this meeting, held on Saturday, April 27, 2013, on
the sixth floor of ICCIMA, after the introductions, tradespeople from both countries engaged in discussions.
Representatives of the Union of Oil, Gas and Petrochemical industries discussed, with Egyptian tradespeople. Transportation problems and supply and delivery on the part of factories were among the most
important issues discussed.Egyptian export products
discussed in this meeting included cotton, cotton fabrics, technical-engineering services, and handicrafts.
Discussions were also held on the manufacture and
export of elevators, supplying spare parts, and cooperation for regional marketing, whereby the corresponding
union on the Egyptian side was introduced. He added
that the quality of Egyptian products is much better than
that of Turkish and Chinese products and that using the
expertise of Iranian manufacturers, Iran and Egypt can
organize and supply the rising markets of the commonwealth countries, Iraq and Afghanistan. It was, thus,
decided that a memorandum be signed with the Iranian
Union or well-reputed Iranian companies.
Also, Mr. Hajian, Head of Iran Khodro Diesel Exports,
explained the services and the quality of Iranian products and heavy-duty vehicles. Mr. Mohammad Taha expressed his interest in continuing discussions on this
subject.
The Joint Seminar of the ICCIMA Delegation and Polish Businesspeople at the Polish
Chamber of Commerce
Headed by HE Dr Nahavandian, the ICCIMA President, ICCIMA delegation participated in a seminar, on
Tuesday May, 7, 2013, which was attended by the Polish Chamber’s Secretary General, the Deputy of the
Iranian Iran-Poland Parliamentary Group, and the Iranian Ambassador to Warsaw. The Polish Chamber’s
Secretary General, the ICCIMA President and the Ira-
nian Ambassador all emphasized the durability of trade
relations and the flexibility of policies.
Discussions also included more attention to the trade
potentials and the cooperation between both sides,
boosting the relationship between the two chambers as
facilitators of the relations between the businesspeople
of the two countries, and more focus on Iran.
93
NEWS
A Closer Look at China-Iran Relations
According to the report of ICCIM’s international department, Mutual cooperation and investment strategies in the fields of engineering and technical services
were examined by representatives of international affair of ICCIMA in a meeting with members of Iran chamber of commerce and Chinese delegations.
The meeting was attended by several government officials, Chairman of the China Council for Promotion of
International Trade and active Chinese companies in
the fields of technical and engineering services, power
plant, construction, road building and oil and gas.
Asia Pacific Director General of ICCIMA will demand
a codified program for future activities while emphasizing on the existing problems particularly financial barriers as well as trade ministry director general of Yun Nan
province declared trader s interest to develop trade and
cooperation with Iranian counterparts and hoped more
information & trade delegation exchange between iran
chamber of commerce and trade development council
of china.
Iran – Thailand to boost trade turnover
According to the report of ICCIM’s international department, the meeting held between deputy of international affair of ICCIMA, Mr. Miraboutalebi and deputy of
international trade promotion of Thailand.
Seyed Mehdi Mirabutalebi, Iran chamber’s deputy in
international affairs said: “we are ready to cooperate
with Thailand in trade and commerce area. Now, the
volume of trade is not satisfactory despite of good relations between two countries.”
Mirabutalebi continued:” the holding of economy-day
can help to promote the knowledge of two sides’ traders. Also the dispatching & receiving of trade delegation
can be done mutually in order to become familiar Iranian merchants with potentials of Thailand “.
Also the parties asked for removing current problems
especially financial obstacles due to develop trade relations and economic cooperation between two countries
and improving existing conditions to facilitate trade between two sides.
Seminar for Introduction to the Regulations
for Export to Iraq
In view of the Iraqi government’s decision to inspect
all imported goods and introduction of foreign inspection
companies for the quality control of export goods, and
the fact that only the French company BV works in Iran,
a general initiation was issued to all ICCIMA members
and the members of local chambers and associations
across the country, and the Seminar for Introduction to
the Regulations for Export to Iraq was held on Tuesday, July 9, 2013, which was attended by Mr Aghil al
Mousawi, the economic attaché of the Iraqi embassy in
94
Tehran; Mr Rezazadeh, the attaché of the IRI embassy
in Baghdad; Mr Ghorbani Faraz, Iraqi trade desk, TPO;
Mr Ghassemian, international inspection manager, BV;
and over 250 business and industrial companies on the
10th floor of ICCIMA.
Mr Miraboutalebi and other members of the panel
explained the present economic relationship between
Iran and Iraq, and then elaborated on the laws, regulations and standards of export to Iraq. Emphasizing
that the Ministry of Commere of Iraq offers many facilities to exporters to Iraq, Mr al Mousawi, the economic
attaché of the Iraqi embassy, urged the audience and
other Iranian businesspeople and industrialists to have
permanent presence in Iraq in order to gain access to
the Iraqi market.
The QA period, at the end of the program, was the
most important part, during which participants presented their questions and problems to the Iraqi embassy
attaché in Tehran and BV officials.
NEWS
The Conference of the Economic Delegation
of the Confederation of West Africa with Iranian Businesspeople
The conference of the economic delegation of the
Confederation of West Africa with Iranian Businesspeople took place on Sunday, June 23, 2013, at ICCIMA.
According to ICCIMA PRO, this conference was attended by Mr Mehdi Miraboutalebi, Deputy, ICCIMA International Affairs; Mr Tir No Danoup, Chair, the Confederation of West Africa; 22 representatives of member
companies of the Confederation of West Africa; an IRI
Foreign Ministry representative; a Bank Saderat representative; Mr Ali Bakhshi, IRI Ambassador to Dakar,
Senegal; ICCIMA experts; and some 70 representa-
tives from Iranian companies working in the fields of
agriculture, fishery, energy and fuels, textile industries,
pharmaceuticals, phosphate and urea industries, and
auto and auto part industries.
At the commencement, Mr Mehdi Miraboutalebi,
Deputy, ICCIMA International Affairs, pointed out the
obstacles in transportation and foreign exchange transfer and added that sanctions have also influenced our
relations with African countries. He mentioned barter as
a method of bypassing these obstacles, and advised
the participating companies not to do “solo” trade with
African countries but to do so in combination. For instance, exporters of technical and engineering services
should work with mining investors, and oil products
exporters with importers of fruit, coffee and cocoa, so
that there will be no need for governmental support and
financing.
Mr Ali Bakhshi, IRI Ambassador to Dakar, Senegal,
then, presented some information about the activities
of the guest delegation, and encouraged Iranian companies to engage in trade in Senegal, especially in the
fields of construction and building materials.
The Meeting of the ICCIMA Delegation with
the President of Radomsko Chamber and
Radomsko Businesspeople
In this meeting, which was attended by the President
of Radomsko Chamber, representatives of Radomsko’s Municipality, Mr Tizhoosh Taban, the President of
Rasht Chamber, the potentials of cooperation between
the three cities were discussed. Discussions also included the conditions of the cooperation of a number
of interested Polish companies with Iran and the conditions of Iranian investment in Radomsko.
The Meeting of the Polish Deputy Minister of
Economy and the ICCIMA President
Mr Andrzej Deja, the Deputy of the Ministry of Economy, in a meeting with Dr Nahavandian at the Polish
Ministry of Economy mentioned the February 2013 visit
to Iran and expressed amazement at the rate of progress in Iran despite the propaganda of the Western
media. Saying that energy and import and export affairs were all handled at the Polish Ministry of Econ-
omy, Mr Andrzej Deja made reference to the developments following Poland’s joining EU in 2004 and also
to the problems arising from the 2009 recession. He
expressed delight in the visit of ICCIMA’s President and
delegation, and requested further economic information about Iran.
95
Last Word
The publication of this issue coincides with the election of
H.E. Dr. Hassan Rouhani as the sixth president of the Islamic Republic of Iran.
The staff and editors of Iran Commerce wish him Godspeed and great success
during his tenure
96

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