Imported signal to automakers? | Online Economy

According to Eqtesadonline, quoting the world of economy, Article 4 of the amendment of the car reorganization plan has two routes for import, so that any natural or legal person can import in exchange for the export of cars or parts and services related to various driving industries. Slow car or do this from the second route, ie import without transferring currency. With the approval of this plan in the Islamic Consultative Assembly, many critics have now approved imports in exchange for imports, and have introduced problems with imports without transferring currency, paving the way for the central bank’s lack of oversight in the method of financing importers and illegitimate foreign exchange entering the supply cycle. They call the commodity and the economy of the country.

Although some drafters of the Article 4 Amendment to the Industries and Mines Commission, as well as some members of parliament, have stated that a mechanism will be defined for imports without currency transfers to prevent the entry of illicit currency into the country’s economic cycle. Has.

In the current situation, however, imports in exchange for the export of automobiles, parts or other goods and services related to various propulsion industries seem to be less costly than imports without currency transfer. But ignoring the costs of this method, the question arises that if the import route is eliminated without currency transfer, can exports meet the needs of the foreign products market? What is clear is that due to the quality and quantity of products in the automotive and parts sector, exports have no place in our country’s automobile and parts industries, and a small annual export is mostly done to friendly and strategic countries of Iran.

Therefore, imports in exchange for exports seem very difficult, if not impossible, in the current situation where the quality of many products has declined due to sanctions and the departure of foreign partners, and production has been declining for the past two years. Meanwhile, the export statistics of automakers over the past two decades show that the two largest automakers in the country are in the forefront in this field and exports are exclusively in the hands of these two companies. The country’s private sector does not have an export record, and parts manufacturers also send a handful of parts to other countries. So what will happen if imports are ceded to these companies in exchange for the small amount of exports of semi-government automakers? Before answering this question, let’s take a look at car import and export statistics published by Iran Customs.

According to the statistics, car exports from 1996 to the first half of 1400 averaged about $ 120 million. The price of imported cars between 1993 and 1996 (car imports have been banned since 1997) averaged about $ 25,000 and the average total value of imports was estimated at $ 1.878 billion. Thus, according to customs statistics, the value of car exports and parts of the country is significantly different from the value of imports, and carmakers in the most optimistic case, if they increase their exports to $ 150 million by the end of 1400, will have a small share of the import market.

So if imports without currency transfers, which critics have pointed out, are not taken into account, then imports in exchange for exports will be the only route for cars to enter the country. This route, as mentioned, will be a rough route due to the quality and quantity of products produced by automakers and parts manufacturers. However, many car industry professionals and experts believe that the arrival of cars in this way can certainly provide a good incentive for car and parts industry activists. Motivation that leads to improving the quality and quantity of products. On the other hand, some are worried about the formation of another monopoly in the market of imported products. These people believe that if imports are eliminated without currency transfer; Car imports will be considered through imports for exports, which will be a very challenging path. As mentioned, in the current situation, there are only two major automakers in the country that export in half. Therefore, if this route becomes the only way for cars to enter the country, car manufacturers will act as regulators of the car market and will make limited and expensive imports. On the other hand, imports will be provided exclusively to producers.

According to the automakers’ export statistics, they may not be willing to import. But imports in exchange for exports can also have a positive side, and that carmakers can solve some of their problems in this way, given their liquidity problems. As mentioned, import in exchange for export can create a strong incentive for the country’s car manufacturers to benefit from this path. The country’s automakers have already imported foreign cars and are not unfamiliar with this route, so if imports in exchange for exports motivate manufacturers and take this path, on the one hand, they can solve their liquidity problems to some extent. On the other hand, take steps to improve the quality of their products.

Export and import drop

The route of import through the currency obtained from the export of cars and parts has been considered by the MPs while the customs statistics in the two sections of export and import show the incompatibility of exports with the import of cars to the country.

In other words, the export route of cars and parts can not bear the burden of providing the currency needed to import cars as it should and perhaps should.

A study of the situation of car imports to the country during the years 93 to 96 shows that in total about 7 billion and 500 million dollars have been saved from the import of more than 300 thousand cars. Imports in 1993 are at the peak, both in terms of currency expenditures and the number of cars imported. This year, a total of more than 2 billion and 400 million dollars of the country’s foreign exchange resources have been spent on car imports. With this amount of dollars, about 102,400 vehicles have been imported into the country. 1994, but unlike 1993, car imports are somehow on the floor. In total, more than 1.2 billion dollars were allocated for car imports and 51,500 cars were imported into the country. Customs statistics show that in the last 4 years of car imports to the country, on average, about 1 billion and 878 million dollars have been allocated for the import of more than 75 thousand cars.

But a look at the situation of exports during the first 96 to 5 months of this year shows that in about 4 and a half years, a total of more than 572 million dollars of cars and parts have been sent from the country’s customs to export destinations. In the mentioned period, the year 1998 forms a ceiling for the export of cars and parts. A total of $ 141 million worth of vehicles and parts have been shipped to destination countries this year. Last year we also saw the lowest amount of exports in this sector. In 1999, a total of more than $ 118 million worth of cars and parts were exported. In the five months since 1400, total exports have reached about $ 49.5 million. Considering the amount of exports of cars and parts during the first 5 months of this year, it is unlikely that the volume of foreign exchange exports this year will be able to break the export record of 1998.

A stimulus for quality improvement

As mentioned, importing a car through the currency of exporting parts and cars has two different aspects for the carmaker. So that if only this route is accepted and the possibility of using the currency of individuals and non-source currencies for car import is not recognized, this issue will become a new monopoly for car companies. On the plus side, it eliminates unhealthy sugary foods from one’s diet. In the current situation, we see that automakers have exclusive control over the domestic market, and if this route is defined for imports, then we will see the unrivaled presence of domestic automakers in this field.

However, Saeed Madani, the former CEO of Saipa, told “Dunya Eqtesad” in this regard, assuming that the use of export currency for importing cars is defined, car companies still can not use this route much in the current situation. The automotive expert goes on to say that automakers’ production lines in neighboring countries now need to be updated, so it is not possible for automakers to want to export SKD cars to assemble and sell their products on their production lines in the destination country. Madani says that the export of cars in the form of CBU, due to the quality of manufactured products and the lack of competition with products in the markets of neighboring countries (even competition with second-hand products) can not be very operational.

The former CEO of Saipa emphasizes, therefore, it does not seem possible to create a monopoly in this direction. Madani believes that, of course, anticipating the use of currency from the export of cars and parts for car imports can be a good incentive to stimulate the automotive chain in some way to think more about export markets. The car expert believes that in order for the automotive chain to be able to move well in this direction, the challenges of sanctions, which have somehow closed the hands and feet of the automotive chain, must first be eliminated.

According to him, the impossibility of cooperating with international automakers on the one hand and also the restrictions on financial transfers have caused our automakers to face many challenges to supply the domestic market, so in these circumstances it is not possible to think about export markets. Madani says that relying on domestic power, cooperating with international brands and attracting capital from domestic and foreign sources can be three sides of a triangle that can make the country’s automotive chain think of export-oriented production.

Farbod Zaveh, an automotive expert, also says that if only the automotive chain can use the export currency to import cars, it could create a monopoly market for them, but if it is possible to transfer the export profits to other people, there will be a monopoly on this. We are not contexts. According to this automotive expert, companies active in the field of auto parts production have the opportunity to think more about exporting their products than car manufacturers, and what makes auto parts manufacturers in this field as they should and may not be successful is not the lack of export market but the lack of manufacturer. Is the country. This automotive expert emphasizes that export-oriented production, although it is an attractive option, is not possible due to the current situation in which the country’s automotive chain is involved and there are all kinds of challenges in this direction.

“If we are to think of exporting cars and parts for import as an effective option, we must address the three factors of international sanctions, FATF-related laws and domestic sanctions, such as bank ratings, before taking any action at the macro level,” Zaveh said. According to this car expert, activating car manufacturers in the export route can cover part of their financial expenses and create a new way for them to earn money.