Lack of liquidity in the automobile industry, stagnation, and accumulated losses of automobile manufacturers have forced them to reduce car production in such a way that the automakers have produced and assembled only one million of the target production and assembly of one million and 600 thousand vehicles this year.

According to The Iran Project, as per the report published today by the Research Center of Iran's Parliament, in January the production index of listed industrial companies increased by 1.9% compared to the same month last year. This is while the sales index experienced a decrease of 1.7%.

15% decline in car production and sales in January

Also, the production and sales indicators have grown by 4.5% and 1% respectively compared to the previous month (December). In general, the "automotive and parts industry" witnessed a 4.8% drop in the production index in January compared to December.

Moreover, point-by-point production statistics in this field show a 6.4% drop in production and an 8.5% decrease in sales in January this year compared to the same month last year.

This is even though the index of production of automobiles and parts in the first 10 months of this year and compared to the same period last year has only increased by one-tenth of a percent, so it has been almost constant.

According to this report, the car and parts sales index has experienced negative statistics. The sales index of cars and parts in January this year has dropped by 3.1% compared to the previous month

The drop in the car and parts index, especially in the production sector, during January this year is in a situation where the analysis of December statistics shows that car manufacturers and parts manufacturers had better conditions in the last month of autumn than in the first month of winter.

"Automotive and parts industry" faced an 11% growth in production in December compared to November of this year.

In the report of the parliament's Research Center, the sales of parts in January of this year compared to the same month of last year has been stated to have dropped by about 11%.

In the production sector, the parts sector has faced a drop of more than 10% in December this year compared to the same month last year.


Major part of accumulated losses is debt of car manufacturers to parts manufacturers: Expert

Iranian automobile expert Masih Farzaneh in an interview with The Iran Project about the decrease in car production and sales highlighted the decrease in liquidity and severe stagnation in this market.

The interests of automobile manufacturers and parts manufacturers are somehow related and overlapping, so, the decrease or increase in their statistics is in line with each other.

He stated that a large part of their accumulated loss is the debt of car manufacturers to parts manufacturers.

Saying that the amount of debt of automobile manufacturers to parts manufacturers is very high, he noted, "When there is no liquidity, car manufacturers are forced to reduce circulation. Therefore, one of the main reasons for the decline in car production is the lack of liquidity."

The expert went on to stress that another factor in the reduction of car production and sales is the high speed of production and accumulated losses of car manufacturers.

The policy of car manufacturers to reduce the speed of their accumulated losses is to reduce production. Therefore, they have had to reduce production to slow down the speed of their accumulated losses, he added.

Farzaneh asserted that the combination of the above two factors has led to a drop in production and sales.

During the last year, car manufacturers were supposed to produce and assemble one million cars, but now with only one month left to the end of the year, only one million cars have been produced and assembled, and car manufacturers have produced 600,000 cars less than their target due to the above reasons, he concluded.