Iranian ministry, car manufacturers seal $60m deal to produce spare parts

The Ministry of Industry, Mine and Trade (MIMT) says the agreement will stop a capital flight of $85m per year as Tehran moves to cushion the effect of unilateral US sanctions.

23 July 2019
ID : 22121
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Major Iranian automotive companies and 32 parts makers from the private sector signed a $60 million deal on Saturday to curb the auto industry’s reliance on foreign suppliers, Financial Tribune reports. 

During an event held on Saturday at Tehran’s International Exhibition Center, which was attended by Industry, Mine and Trade Minister Reza Rahmani and other officials, Iran Khodro (IKCO) and SAIPA agreed to a deal worth 7.4 trillion rials ($60 million) with 32 small- and medium-sized parts makers to promote auto localization, IRNA reported.

On the sidelines of the ceremony, government officials and the respective heads of IKCO and SAIPA— Hashem Yekezare and Mir Javad Soleimani—and managers of local parts makers discussed ways to produce at home the key auto parts.

As per the agreement, the money will be used for the production of 35 car parts, including gaskets, hydraulic jacks, turbocharger, speakers and amperes.

Farshad Moqimi, a deputy industries minister, said the listed parts are imported, as they are not produced by domestic manufacturers.

"The local production of 35 auto parts will help curb capital flight to the tune of €85 million annually," he added.

Rahmani called for an active participation and contribution to realizing localization goals in the sector, while noting that automakers will be required to present periodic reports on their performance.

"Auto manufacturers and parts makers need to deliver weekly reports on the production rate, the number of cars stored by the companies and more," he added. 

Earlier in May, SAIPA Group, Iran’s second largest carmaker, launched an initiative to produce domestically all the necessary automobile parts in a bid to facilitate the national production growth and offset the sanctions as well. 

 

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