After the approval of JCPOA, the automotive industry started to count on foreign investments but after two years just three contracts have been inked and there are still lack of foreign investments.
Khodrocar – Iran’s automotive industry was one of those who made most of JCPOA. After the approval of this joint comprehensive plan of action, major companies of automotive industry wanted to cooperate with Iranian automakers and after that, the companies from China, Korea and India started to cooperate with Iranian companies. However, most of this suggestion didn’t realized and just 3 of them turned into contracts.
Two years after JCPOA and 8 years remaining to the 2025 outlook, nothing special happened for automotive industry except the increase in vehicle production volume.
Amirhosein Kakaei, automotive industry expert, told Khodrocar that the reason why large investors, with the exception of a few foreign investors, do not enter the automotive industry is the bad business situation and said: "I always believed that after JCPOA, our automotive industry needs time to attract foreign investments and continue its cooperation with the foreign investors.”
Kakaei added: "But when the automobile plans to produce 200,000 units annually, the issue of cooperation with foreign investors and their number will be a little more important. If, at least five investors and carmakers enter the market and each one want to produce at least 200,000 machines, about a million vehicles will be produced annually.”
He mentioned the vehicle capacity and requirement of the country and the fate of domestic vehicle production, and said: "Currently, if the same number of investments that have signed the cooperation agreement will produce and deliver their products it is expected that the vehicle imports will reach to 30 percent.”
The automotive expert added: "One of the main reasons for the lack of investors in the automotive industry is the inadequate business environment in Iran.”
Kakaei added: "The entrance of investors requires production lines and production supplies and they can’t leave the country whenever they want. That is the reason why it is a risk for them.”
He mentioned the importance of Investing in the supply chain, and said: "Competitive supply chain means the participation of every single part automotive industry, from part manufacturers to infrastructures.”
Khodrocar reporter: Negar MirKarimi
Khodrocar translator: Maziyar Jafarieh
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