SAIPA Makes Pride With 45% Import Dependence

EghtesadOnline: Iranian carmaker SAIPA needs to import auto parts worth €1,400 for making each unit of Pride, a €3,150 vehicle that the company has been manufacturing for the past three decades.

News ID: ۷۸۴۹۳۲

08 October 2019

With a pompous air, SAIPA CEO Javad Soleimani told IRNA, “Previously, we had to import auto parts worth €1,770 for making each unit of Pride. We have brought down the import costs to €1,400.”

The vehicles’ factory price is sold domestically for about 400 million rials (€3,150).

Soleimani’s latest comments indicate that imported parts have at least a 45% share in Pride, Financial Tribune reported.

SAIPA CEO’s comments are in stark contrast with a report released by Iran Vehicle Manufacturers Association in January 2018. At the time, IVMA—which some say is one of the lobbying arms of local carmakers—reported that Pride is 87% locally produced.

The car company’s CEO is yet to explain how in less than a year, local auto parts makers’ capabilities have shrunken to a degree that they could no longer manufacture parts as in the past.

After the 1979 Islamic Revolution, Iran’s auto industries have always received government support and were touted by officialdom as a “national industry” and a source of “national pride”. However, semi-state carmakers, including SAIPA and Iran Khodro, which have been bankrolled more than once by the Iranian government have failed to make decent cars that can meet basic international standards.

For instance, SAIPA says it has sold over 7 million Prides since its production started in 1993 in Iran. Pride is based on a Kia Motor hatchback from the 1980s. The South Korean firm ended the production of this car in 2000. However, SAIPA would not let go of the cash cow that has continued to milk the government because of its chronic debts to parts makers. This loss-making company has always reported budget deficits, but never declared its bankruptcy.

Coffin on Four Wheels

Over the past 11 years, 34% of those who lost their lives in road accidents in Iran, constituting 70,056 victims, died in a SAIPA Pride.

Iran Traffic Police Chief General Kamal Hadianfar earlier told ISNA, “A review of traffic accidents’ data from the past 11 years shows that 34% of the victims were passengers and/or drivers of Pride.”

Road accidents claimed 206,049 lives in the 11-year period ending March 2019, data from the Iranian Legal Medicine Organization show.

Hadianfar noted that the police force, Industries Ministry and SAIPA managers have held talks for phasing out the production of Pride.

“At the start of the next fiscal year [starting March 20, 2020], the Traffic Police will not issue license plates for Pride,” he announced.

This is not the first time Iranian officials are promising to dump the substandard and costly car, although it is the cheapest among other Iranian vehicles. It is often likened to a coffin on four wheels by the locals.

Qualitatively, SAIPA’s Pride tops the sin list. The vehicle is notorious for its poor mileage and high emission rate, apart from being a major road hazard.