Poor Quality Cars Rule SAIPA Logbook

EghtesadOnline: During the first five months of the current fiscal that started in March, Iran’s second largest carmaker, SAIPA Group, produced 239,733 vehicles and sold 221,600 units.

News ID: ۷۷۹۰۲۸

05 September 2017

According to the company’s latest production and sales report published on codal.ir, the automotive group made 62.7 trillion rials ($1.6 billion) from the sales.

While SAIPA trumpets its joint venture deals with foreign carmakers, low-quality cars are still dominant in the company’s sales.

SAIPA

Through its main factories 172,096 vehicles were manufactured during the five months in which the share of its mini Pride and Tiba models was 89%, according to Financial Tribune.

In the period the company sold 94,644 Prides and 48,434 units of Tiba. The value of these sales was reported at 27 trillion rials ($709 million).

The two models are notorious for low quality and score poorly in the Iran Standard and Quality Inspection Company rankings. ISQI is a private company that conducts monthly quality and safety tests on behalf of the Ministry of Industries, Mining and Trade. Depending on strict tests vehicles receive one to five stars.

First models of Pride rolled out of SAIPA assembly lines in 1993 but the car has never been able to rise above the one and lonely star. Last month Tiba earned an extra star and joined the two-star club, a development which SAIPA publicized as a big achievement. The model very soon lost that prize apparently due to declining   quality.

The third most produced vehicle by SAIPA is the Kia Cerato. According to the statistics, 10,392 units of the model were produced and 8,360 units were sold.

The Cerato made/assembled by SAIPA is an old version of the model designed in 2010. Currently, the imported 2017 model produced by Kia Motors is available in the local market for 1.5 billion rials ($38,900). SAIPA’s own Cerato is available at 970 million rials ($25,000). In the international market, the 2017 Cerato goes for $20,000 to $34,000 price tag depending on options.

According to SAIPA chief Mahdi Jamali, the company is negotiating with the South Korean carmaker firm to start production of a newer version of Cerato.

Jamali says “SAIPA is trying to sign a production deal with Kia, through which several other models will be introduced in the local market.”

Pars Khodro

A subsidiary of SAIPA, Pars Khodro has been able to record a better performance in terms of quality compared to its parent company.

In ISQI reports all the models offered by Pars Khodro got at least three stars. During the five month period, the company has produced 57,334 vehicles and sold 51,058 units.

In addition to Renault Sandero and Logan (locally known as L90), the company produces several Chinese Brilliance models. The French cars have earned four stars from ISQI while Brilliance got three.

Battle Over Quality

Last week Director of ISQI Ashkan Golpayegani said, “According to law, production of several low-quality vehicles should be halted by the end of the current fiscal.”

“Production of cars that fail to earn at least two stars in ISQI ranking will be halted,” he added.

Golpayegani was indeed echoing the position of the head of the Industrial Development and Renovation Organization of Iran. Mansour Moazemi is of the strong opinion that “Substandard vehicles have got to go by the end of this year.”

According to Moazemi, ISQI has been authorized by the government “to put a permanent end” to the production of all low-quality cars that contribute generously to air pollution and unacceptably high levels of gasoline consumption.

If companies flout the quality regulations and “continue to produce low-quality cars they will not be allowed to sell them in the market,” says the IDRO chief without specifying what would happen to such vehicles whose numbers are not small by any reach of imagination.

According to reports, the first low-quality vehicle to leave production lines will be the originally South Korean Kia Pride produced for more than two decades by SAIPA.