Dollar-eating carmakers! | Online Economy

According to a report submitted by Iran Khodro, Saipa and Pars Khodro to the stock exchange, each of these automakers has used a variety of currencies to supply the foreign parts they need during the first nine months of this year. Accordingly, Iran Khodro had the highest valuation, spending about 890 million yuan, euros, dirhams and dollars (in total).

In the next category is Saipai, which by the end of December this year has consumed about 82 million yuan, euros and dirhams (in total). Finally, Pars Khodro has registered a valuation of about 12 million yuan and euros (in total).

However, this amount of currency consumed in the country’s automobile industry during the first 9 months of this year is less than the currency used by private sector companies in the period under review (private automakers have produced 49,000 cars in the first 10 months of this year).

Given the low internalization of privately owned cars, it can be estimated that the real value of the automotive industry in the first nine months of this year is much higher than one billion. It was recently reported that the country’s major automakers spend an average of 1,500 euros on each product they produce.

Given that the level of internalization in these three automakers is said to be above 90% and in the private sector about 20%, a relative and close to accuracy figure can be extracted for the valuation of private sector companies. If we assume that for every 10% of dependence on foreign parts, 1,500 euros of currency is needed, private automakers with an 80% vacuum of domestic production, spend about 12,000 euros to produce each device.

Multiplying this number by 9 months of private circulation, it can be estimated that these companies have spent about 600,000 euros for the production of their 49,000 units, although this figure is not exact and may be more or less.

Thus, the automotive industry has had a significant valuation (around € 1.6 billion) in the first nine months of this year, while imports have been banned for the past three and a half years on the pretext of the same currency issues.

At the end of June 1997, the government banned the import of cars in order to manage foreign exchange resources, after the United States withdrew from Borjam and announced the resumption of sanctions against Iran. The import ban gradually had an effect on the country’s car market, with prices soaring as the supply of foreign cars was reduced and eventually cut off. Of course, there was another important reason for the price explosion in the imported car market, and that was the growth of currency prices. However, the effect of the import ban on price growth is undeniable.

The price increase caused by the import ban affected not only the foreign car market but also the domestic market. In fact, due to the fact that the price floor of foreign cars increased sharply, the price ceiling of domestic cars also increased.

In these three and a half years, despite many efforts to resume car imports, the government did not give in, and even now that members of the Islamic Consultative Assembly agree with imports and insist on lifting the ban on cars entering the country, they continue to oppose this issue. It becomes. The Islamic Consultative Assembly recently voted to import cars for the third time.

According to the decree, limited imports of cars into the country are free for export without transferring currency. The resolution has been referred to the Guardian Council twice before, but was rejected both times. For the first time, the Guardian Council itself made relatively simple objections to the car import bill and returned it to parliament.

The parliaments rectified these objections and the resolution was expected to be approved, but the Guardian Council again rejected it due to the opposition of the High Council for Supervision of the Implementation of the General Policies of the System (based in the Expediency Council).

Because the parliamentarians insisted on the car import bill, they approved it again in public, but this time the bill went to the Expediency Council instead of the Guardian Council. Many are now waiting for the Expediency Council to announce its vote on the car import bill, while the High Supervisory Board is sitting on the board, and given the board’s opposition, the board’s vote is likely to be negative.

The reason for the Supreme Supervisory Board’s opposition to car imports is that it contradicts the policies of the resistance economy and the protection of Iranian labor and capital, which include the management of foreign exchange resources, and the government therefore banned the import of many goods, including cars. . Currently, the issue of lack of foreign exchange resources is still one of the reasons for opposition to car imports, both from the point of view of the Supreme Supervisory Board and even the government. Incidentally, the government is not happy with the import of cars, and the Minister of Industry, Mines and Trade is of the opinion that the ban on cars entering the country should be established until further notice.

Four reasons for the freedom to import cars

Although managing foreign exchange reserves is important given the country’s sanctions, for four reasons, the continuation of the car import ban seems neither justified nor beneficial.

First, the country’s auto industry is not undervalued, so if it comes to managing foreign exchange resources, then there is no difference between production and imports. Of course, some may say that the automotive industry has a value while it has also created employment, so this issue (the value of the country’s car industry with any figure) is justifiable. However, imports also create jobs, so if the currency is taken out for the import of cars, a job will be created in return.

The second reason, however, is related to the details of the car import decision. According to what the MPs have stated in the car reorganization plan and the clause that they have added to the 1401 budget bill, in both cases, no currency is going to leave the country at all. Accordingly, in the plan to organize cars, imports are seen in exchange for exports and without leaving the country, and in the budget bill, foreign currency of foreign origin is considered for the import of 60,000 cars.

Therefore, since the currency is not going to be exported, there will be practically no special currency pressure on the country for car imports, just the opposite of the car industry. At present, automakers and component makers are not allowed to use foreign currency, so all their currency is taken out of the country.

But the third reason why the continuation of the car import ban is neither justified nor expedient is related to the issue of the car market. With the import ban, prices in the car market rose sharply, especially in the imported models sector. However, experts predict that by lifting the import ban and resuming the import of cars into the country, at least 50% of the current price of foreign cars in the market will be reduced. According to them, this price drop will definitely affect the domestic car market as well.

Eventually, with the ban on car imports, a very important project of scrapping and replacing worn-out cars almost fell into a coma, and now many are reporting a tsunami of worn-out cars in the next three years. At the time of import liberalization, importing companies were required to remove one or more used cars, so the scrapping process was relatively straightforward, but in the past three and a half years, the process of scrapping used cars has slowed down dramatically.

However, if car imports are liberalized, the project of scrapping and replacing worn-out cars will come to life, which will have a significant impact on reducing per capita fuel consumption and pollution, as well as increasing road safety.

Yuan tops, dollars to bottom

But according to the automakers’ financial statements, the majority of the currencies they used during the first nine months of this year were the yuan, the euro, the dirham and the dollar, respectively. According to published reports, the main consumer currency of automakers in the period under review was the yuan, while Iran-Khodro, Saipa and Pars-Khodro had a total value of about 870 million yuan during this period.

Although the Chinese are riding the wave of sanctions against Iran, published statistics show that the main source of foreign parts needed by the country’s major automakers this year has been China. Naturally, by adding private sector companies, which are mostly Chinese-made, the value of the country’s automobile industry in the yuan sector will record a much higher figure.

Separately, Iran’s vehicles have spent more than 860 million yuan in the first nine months of this year. Saipais also consumed over 37,000 yuan during the period under review. Pars Khodro also reports that the company has had less than 90 million valuations in the yuan sector in the first nine months of this year. But according to statistics, carmakers have consumed more than 1.5 million dirhams in the period under review.

Meanwhile, the largest foreign exchange consumption of automakers in the dirham sector is related to Iran-Khodro. Accordingly, the Pars cars have not used dirhams and Saipa has consumed only 12,230 dirhams in the first 9 months of this year.

But according to available statistics, automakers’ dollar consumption has been very low during the first nine months of this year. According to statistics, in total, only $ 50,246 was used by automakers in the first nine months of this year, all of which was’s share of Iran’s vehicles. In other words, Saipa and Pars Khodro have practically removed the dollar from their foreign exchange basket. In the euro area, the statistics show the second place of this currency in the foreign exchange expenditures of Iranian automakers during the first 9 months of this year.

According to published reports, Iran Khodro, Saipa and Pars Khodro have spent a total of about 105 million euros in the first nine months of this year. However, their foreign exchange spending in the euro area last year was about 61.6 million euros. So while the year 1400 is not over yet, the automakers’ foreign exchange consumption in the euro area has risen by 444 million euros, and of course this number will be higher at the end of the year.

According to the financial statements submitted to the stock exchange, the consumption of Iran-Khodro Euro currency during the first 9 months of this year was about 20.5 million Euros, which is a little more than the whole of last year. Saipa also consumed 81.5 million Euros during the first 9 months of this year, which was less than 33,000 Euros during the whole last year.

This figure shows that the orange for the road has been the record for the use of the euro in the first 9 months of this year. Pars also used less than € 1.8 million last year, up from nearly € 1 million in the first nine months of this year.