Raisi Says Iran Car-Makers Must Learn From Defense Industry

Iranian President Ebrahim Raisi recently said Iran’s car industry should apply the technology, and show the motivation, developed under sanctions in the arms sector.

"Our military and nuclear industries have been subjected to the worst sanctions, but we have made great achievements because we have acted as if we were doing motivated jihad (effort) to make progress," he said, during a visit to Bushehr province October 8.

Raisi went on to reply to those who he said asked why Iran could build missiles but faced problems with automobiles. "The answer is clear − because we have not invested the technology of the missile industries in the automotive industry.”

Raisi’s comment could have applied to the Soviet Union’s centralized economy where the country could compete with the United States in weapons and space exploration but was unable to produce quality kitchen appliances or cars.

Iran's automotive industry, the county’s largest after oil and gas, employs 700,000. It was valued in 2020 at $26.4 billion by India-based Modor Intelligence, which forecasts 10 percent sectoral annual growth to 2026. This would be possible without sanctions and with new infusion of investments and foreign partnerships. The analysts attributed a recent decline in growth to Covid-19 and United States sanctions.

French companies Peugeot and Citroen withdrew from substantial joint projects in Iran when the US introduced ‘maximum pressure’ sanctions in 2018, but Iran, reports Motor Intelligence, “is taking the necessary actions to boost the production of vehicles and parts locally to meet the demand for vehicles and reduce its import cost.”

Intelligent cars

Speaking to the Iranian Students News Agency (ISNA) Friday, Deputy Chief of Iran's traffic police, Brigadier-General Taymour Hosseini said road accidents were occurring due to inadequate safety standards as Iranian companies struggled to keep up. "Big companies in the world are working on intelligent cars but we have dropped our expectations so much that we are happy with having anti-lock braking systems,” he said.

With around 20,000 annual deaths, Iran has a poor traffic safety record. According to World Health Organization (WHO) data published in 2018, road traffic accidents deaths in Iran reached 21,831 or 6.5 percent of all fatalities.

The WHO said in fact-sheet published in June that93 percentof world road fatalities occurred in low- and middle-income countries, which have only 60 percent of the vehicles. “Road traffic injury death rates are highest in the African region,” with traffic accidents globally “the leading cause of death for children and young adults aged 5-29 years,” the WHO noted.

Iran's trade officials say neighboring Iraq, once along with Syria a thriving market for Iranian vehicles, has rejected Iranian vehicles due to their failure to meet the required standards. Hamid Hosseini, former secretary of Iran-Iraq chamber of commerce told Fararu website that Iraqis were particularly concerned about airbags, fuel consumption and braking systems.

"Special attention should be paid to safety issues and quality if this administration seriously wishes to export automotive products,” Hosseini said. “Otherwise exporting vehicles will not happen," he claimed. Hosseini also said that higher standards in Iraq meant that it would no longer be possible to produce vehicles in Iraq even if US sanctions were lifted.

According to the latest figures, in the past five months Iran has exported only 514 vehicles due to various reasons, including international banking issues resulting from US sanctions.