SAIPA Says to Produce 3,000 Renault Cars

EghtesadOnline: Pars Khodro, a subsidiary of SAIPA car company, has restarted producing Renault cars, the company said in a statement.

News ID: ۷۸۵۳۲۵

28 January 2020

Last March Pars Khodro stopped producing Renault vehicles because the “new US sanctions had disrupted supply of parts.”

Following the imposition of tough US penalties against Tehran, all European automakers cut ties with Iran. Local carmakers, highly dependent on foreign suppliers, have faced an uphill task in sustaining their operations, Financial Tribune reported.

One of the firms hit hard by the new restrictions is SAIPA. It used to make a wide range of Renault cars including Sandero, Sandero Stepway, and Logan (locally known as L90 or Tondar90). With Renault cutting ties, SAIPA was forced to suspend production of these largely popular models.

In a statement published on Pars Khodro website, the company announced, “Production of Renault has restarted and will continue for a limited period.”

The company said a cargo of Renault auto parts had been imported earlier but was stuck in customs warehouses. “The company as been able to clear the cargo and will produce 3,000 units of Renault cars.”

Plummeting Output

In addition to putting the brakes on the production of French-derived vehicles, the US sanctions have hurt domestic auto production in general. Automotive output fell by 24.8% during the ninth months ending Dec. 21 compared to a year earlier.

According to data published by Fars News Agency, Iran produced 572,965 cars and commercial vehicles during the period.

Previously, the Industries Ministry used to regularly publish statistics about car production. However, following the pattern of decline in output, the ministry had a change of heart. It stopped releasing data.

The number of passenger vehicles produced during the period was 524,167, almost 26% lower than the year before.

Besides, the production of vans, minibuses, buses, and commercial vehicles respectively saw unprecedented decline of 86.2%, 54.6%, 28.4% and 73.7%.

Mismanagement and corruption, plus mounting pressure of US sanctions, have in fact derailed Iran’s auto industry. As if all this was not enough. the main semi-state car companies (SAIPA and Iran Khodro) have struggled with recurring scandals over the past years, including the arrest of several managers on charges of price gauging, misappropriation of funds and fraud.

Industry insiders and local media have long said that the two companies are on the verge of bankruptcy and, as usual, need “government bailout to save thousands of jobs” in the chronically dysfunctional and irreversibly ailing auto sector.