IKCO Arm Works on Advanced Tech to Bolster Car Output

EghtesadOnline: A knowledge-based company affiliated with major carmaker Iran Khodro (IKCO) is working on localization of auto parts to help curb the sector’s reliance on foreign suppliers.

News ID: ۷۵۱۳۲۳

22 October 2020

Asghar Rabiei, the CEO of the automotive molding company, said his firm is working on the production of raw materials and molds for metal casting and auto parts production lines, Mehr News Agency reported.

He said the molding company is specialized in the design and production of metal and plastic car body molds of sizes G2 to G5.

“The company possesses technologies for the production of advanced molds used by the world’s giant automakers for the mass production of auto parts,” he said.

“With advanced molds, all the stages of producing a particular component take place consecutively in one specific frame with a significantly higher speed and quality compared to classic molds.”

Rabiei said the advanced molds have a longer lifespan and are more cost-effective compared to the conventional molds.

According to the CEO, the company has already developed car body molds for two models of Peugeot, IKCO’s products, and 131 parts.

He said the company is increasing its mold production capacity to 900 tons per year, which is almost double its capacity in the current Iranian year (started March 20).

Rabiei noted that the molding company can also upgrade its production of gauge panels and industrial machinery, metal sheet coil cutting and post-production services.

The industry insiders believe that there is a huge demand for auto parts in the domestic market, but the country’s technological level is not advanced enough to produce high-tech car components.

Arash Mohebbinejad, secretary of Iranian Auto Parts Manufacturers Association, says Iranian automakers have been able to curb their reliance on foreign suppliers extensively, but still 25% of key auto parts need to be imported.

Since the US sanctions took effect in the summer of 2018, the devaluation of Iran’s national currency rial has made auto parts imports economically unviable.

“Outdated technologies employed by Iranian carmakers have put a cap on localization efforts,” Mohebbinejad said.

“However, higher domestic production [of parts] can reduce the dependency of industries on the international supply chain, although the goal could only be attained with state support.”

Longstanding Agenda

The Defense Ministry has lately initiated efforts to help domestic automakers curb their reliance on foreign parts.

In June last year, the ministry began to share its technological capabilities with the two major domestic car companies, Iran Khodro and SAIPA.

With the ministry's support, the production of homegrown substitutes for key imported car parts was placed on the agenda.

In an integrated move, the ministry signed a deal with SAIPA in December 2019 to bolster collaboration in research and development, design, technical monitoring, safety standards and localization of parts.

The ministry helped produce domestic substitutes for 35 key auto parts in Iran to curb the industry’s reliance on the global supply chain.

According to Seyyed Javad Soleimani, CEO of SAIPA, 23% of auto parts used in SAIPA cars need to be imported.

“If the agreement with the ministry is fully implemented, localization of parts manufacturing will prevent the capital flight of $300 million per year,” he said.

Recently, the Iranian Army also joined the Defense Ministry in backing domestic automakers.

A month ago, SAIPA signed an agreement with the Iranian Army’s Air Force, based on which the latter’s technologies will be shared with the carmaker.

Deputy Coordinator of Iran Air Force Brigadier General Mehdi Hadian and a member of SAIPA’s board of directors, Masoum Najafian, signed a collaboration deal.

According to Hadian, the army’s Air Force has upgraded high-tech equipment to support the domestic auto sector.

“The linkup can put this potential into practice and fill the gaps on both sides,” he said.

Najafian noted that self-sufficiency in the production of all auto parts, especially high-tech components, is the main challenge facing the auto sector.

“The goal is certainly achievable with the army’s support. Besides maximizing the share of domestic producers in the auto parts sector, this cooperation can also be extended to launch new schemes and expand the sector’s horizons,” he concluded.