General

Iran’s Automobile Industry; Another Victim of the Ayatollahs

Iran's car industry

Auto manufacturing is Iran’s second-biggest industry after the extraction and refinement of petroleum. Iran’s automobile industry, in fact, constitutes around 10% of the country’s gross domestic product. Meanwhile, there are approximately 800,000 workers working in this industry, around 4% of Iran’s workforce.

The fact is both sides engage in corruption

However, like many other economic sectors in Iran, Iran’s automobile industry suffers from the government’s unreasonable policies that impose massive expenditures on the economic infrastructure of the country. On the other hand, vehicle manufacturing is mired with corruption, mismanagement, and inherent incompetence due to its direct or indirect links with the government. It is notable that currently, several managers of the two largest Iranian automaker companies, Iran Khodro and Saipa, are in jail on charges of corruption.

In such circumstances, the governor of the Central Bank of Iran (CBI), Abdolnasser Hemmati, accused automobile manufacturers of inefficiency and wasting financial resources, saying: "How long are you going to continue the inefficient production of vehicles?" Hemmati also claimed that CBI had allocated more than one billion dollars to automakers and auto part manufacturers.

In response, automakers believe that CBI has been crippled and Hemmati’s vitriolic remarks are a mere excuse to avoid solving the problems of this industry. Auto manufacturers also warned officials that if the auto manufacturing industry fails, they will be forced to import $12-15 billion worth of vehicles every year. Meanwhile, the country has lost at least 85% of its annual revenue, and Hemmati has admitted that the annual revenue is not more than $4-5 billion per year.

Automobile industry; a battlefield between official Mafia gangs at the expense of the people

The reality is Iran’s automobile industry is the victim of a confrontation between two Mafia gangs. On one side are the government and its branches and sectors, and on the other are automakers who are also affiliated to several parts of the ruling system. Pursuing their own interests, both parties have plunged Iran’s economy into corruption and inherent incompetence.

Regrettably, the people are the real victims of rivalries between Mafia gangs. After Sierra Leone, Iran is the record-holder of the highest car accident fatality rate in the world. Previously, UNICEF announced, “each year, road traffic crashes kill nearly 28,000 people in Iran, and injure or disable 300,000 more.” Inferior and substandard cars are one of the major reasons for this volume of road casualties. Also, dangerous roads commonly impose billions of dollars on the country's economy each year.

“Fixers are lining their pockets with the money of this industry instead of automakers. Therefore, government policies do not leave a profit for automakers and part makers to reinvest,” Davood Mirkhani Rashti, an adviser to automakers' association, told to semi-official Tabnak agency news.

Mirkhani also disclosed a small part of the nepotism in the ruling system, saying, “There are 7,000 employees who have been imposed on the auto manufacturing industry through promotion letters by members of Parliament. So, automakers now face a surplus of staff and their productivity has declined.”

Thus, there is no need for more explanation about the irritating impact of promoted letters on the Iranian labor community which results in the unemployment of thousands of employees only in this industry.

Therefore, not only Iran’s automobile industry counts as a victim of different Mafia gangs of the Islamic Republic, but the lives and future careers of millions of Iranian people are taken hostage by the Ayatollahs.

 

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