Are automakers really being handed over?
According to Eqtesadonline, quoting the world of economics; Reza Fatemieh Amin, who traveled to Baharestan yesterday to answer questions from members of the Islamic Consultative Assembly, said the government should not be involved in car manufacturing.
He emphasized that the Ministry of Silence does not want to be an entrepreneur in the automotive industry: “We are advancing our plan in this direction (the government’s withdrawal from the automotive industry), so that the government’s shares in Saipa and Irankhodro are blocked and as soon as possible.” Will be assigned. Minister Samat also criticized the phenomenon of “self-equity” in the country’s car industry, calling it a wrong practice that should be corrected.
But the Ministry of Silence’s plan to divest state-owned shares of automakers raises several other important questions. Although there is no doubt about the need for the government to leave the car industry, the question is whether now is a good time to divest shares? Isn’t it better to transfer the state shares of Iran, Khodro and Saipa at a time when the country is not under sanctions? And whether the government has a place for foreign customers in the project of transferring its shares in the automotive industry?
According to Fatemi Amin, the new project to oust the government from the car industry will be key in the near future. Since Fatemi Amin has emphasized the block offer of automakers’ shares, it seems that the government intends to transfer shares to large companies, and in the meantime, component makers are usually the first and last option.
The issue of transferring the shares of automakers to component companies has been raised in the past, and even the component manufacturers themselves have reached the threshold of forming a joint consortium to acquire these shares. At present, it seems that if the government officially announces the transfer of its shares in Iran, Khodro and Saipa, the parts manufacturers will be in the first line of purchase.
Meanwhile, minus the objections to the automobile manufacturers (due to the purchase of government shares of Iran, Khodro and Saipa), the events and margins of the last 2 years have made the way for the people of the parts industry to gain access to the automakers’ shares.
Although there are several major auto parts companies in the country, it seems that only two large domestic auto parts manufacturers can afford it, given the very high base price of state-owned automakers. However, they have also been involved in litigation over the past year and this year, and it is unclear whether they will be eligible to buy state-owned shares in Iran, Khodro and Saipa.
Apart from this, many experts and even activists in the automotive industry do not consider it advisable to sell government automakers’ shares to auto parts manufacturers, and believe that when they remain in office, they will certainly not be able to run the auto industry. However, the component makers, while always being the customer of buying the government shares of Iran-Khodro and Saipa and are already considered their shareholders, consider this issue (buying the shares of Iran-Khodro and Saipa) as their right.
However, some automotive experts and activists believe that there is no qualified and qualified customer for the country’s automobile industry at all, and if the shares of Iran Khodro and Saipa are transferred to the locals, nothing special will happen in its development. Under these circumstances, the option of selling government-owned shares of foreign automakers to foreign companies is an issue that, of course, will be ruled out for the time being and as long as there are sanctions.
Privatization, from word to deed
But Minister Samat announced the government’s withdrawal from the automobile industry, while in the previous government, there was a lot of talk and even planning about the transfer of government shares in Iran, Khodro and Saipa, but neither of them came to an end so that these two major automakers remain in power. Remain the power of the government.
Now, according to Minister Samat, the 13th government has also entered the field of privatization of car manufacturers, although it is not clear at what mechanism the shares of Iran, Khodro and Saipa will be transferred. In the previous governments, plans were made to transfer the shares of Iran Khodro and Saipa, however, there was no motivation and will to complete them.
As a result, the big automakers remained under the heavy shadow of the government and its loss-making policies. However, many experts believe that the main root of the inefficiency and backwardness of the country’s automobile industry is its statehood.
Although, according to Minister Samat, government shares (meaning the Industrial Development and Renovation Organization of Iran as the government’s representative) in Iran, Khodro and Saipa do not reach 23% in total, these relatively small shares are allowed to interfere in the affairs of the two major automakers. Has given to governments, parliaments and politicians.
From imposing manpower on automakers and requiring non-economic investments to interfering in foreign contracts and orderly pricing, all are negative consequences of the government’s presence in the country’s auto industry. For many years, therefore, experts and activists in the automotive industry, and even some government and parliamentary officials, have been insisting that the government should leave the automobile industry and transfer its shares to the real private sector, which has the necessary qualifications.
According to them, with the withdrawal of the government from the automotive industry, firstly, the roots of non-economic and political decisions in this industry will be greatly burned, and secondly, automakers can be freed from government constraints, on the path to sustainable development (provided some other events occur. Lifting of sanctions).
Although the debate over the privatization of automakers has always existed in recent years, it is now hotter than ever, given the events that have highlighted the depth of the poor quality of domestic cars.
Some members of parliament have called for the government to leave Iran, Khodro and Saipa by zooming in on privatization, and now, as Minister Samat says, the government itself no longer wants to stay on the “special road.”
Of course, in previous governments, when it came to privatizing carmakers, they talked about the need for it and even a plan, but in the end, the project of transferring shares of Iran, Khodro and Saipa remains part-time and obsolete.
A clear example of this happened in the government before and during the ministry of Reza Rahmani. Rahmani spoke seriously about the transfer of state-owned shares of the automakers and even planned three phases to advance the project, but only the first phase was incompletely implemented. Rahmani’s plan was to first transfer the surplus property of the automakers and then their unnecessary subsidiaries, and finally sell the state-owned shares of Iran Khodro and Saipa to the private sector before the end of the Twelfth Government.
However, it seems that the Ministry of Silence of the 13th government does not accept this stage and intends to deviate from its “special road”. Of course, Minister Samat did not provide specific details on how the shares of Iran-Khodro and Saipa were transferred, and the only issue that seems clear is the block supply of government shares in Iran-Khodro and Saipa.
Given the block offer, it is suspected that the Ministry of Silence intends to transfer government shares in the automakers to large corporations (perhaps parts manufacturers), although nothing is official or definitive yet. However, many experts believe that the best option for selling government shares of Iran, Khodro and Saipa are reputable foreign companies. According to them, carmakers such as Renault France, given the similar experience in other countries, if they buy government shares of Iranian carmakers, they can develop them, while they have already expressed their desire in this regard.
If the government leaves the car industry …
Government equity in the automotive industry over the years has led to uneconomic, political, and damaging developments in this strategic industry. Recently, a member of the Islamic Consultative Assembly announced that there are 25,000 surplus workers in the country’s automobile industry, which have been imposed on Iran, Khodro and Saipa by individuals affiliated with the government and the parliament.
Of course, if the government did not have a stake in the car industry, it would never have imposed so much surplus manpower on the big carmakers. Along with this issue, the implementation of mandatory pricing policy also dealt a great blow to car manufacturers, one example of which is the accumulated loss of 85,000 billion tomans. Although the government sometimes interferes in the pricing of private sector cars, its sphere of influence in this sector has never been as great as that of Iran Khodro and Saipa. Therefore, with the withdrawal of the government from the automobile industry, one of the most important events is the automatic elimination of the mandatory pricing policy.
But the government’s withdrawal from the car industry could pave the way for a stronger presence of foreign companies in the country’s car industry, although of course this depends directly on the fate of Borjam and the lifting of sanctions. During the Borjam era, automakers were less free to choose partners and how to work with them, and even their contracts were signed at the Ministry of Silence. Now, if the day comes when the government does not have a representative in the automotive industry, Iran Khodro and Saipa will be free to choose partners and how to cooperate with them.
The transfer of state-owned shares of carmakers, however, could bring another positive development, and that is management stability. Due to its influence in the automobile industry, the government dismisses and installs the managers of Iran Khodro and Saipa, so that during these years, the management life of these two companies has not been more than 7 years. On the other hand, dismissals and installations have political roots, and sometimes non-specialist and carnival managers have taken the helm of major automakers. However, with the withdrawal of the government from the automotive industry and the formation of a board of directors consisting of private shareholders, firstly, the elections will move towards apoliticalism and meritocracy, and secondly, the managers of Iran Khodro and Saipa can advance their plans with confidence in management stability.
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