Khodrocar - The New Year beginning was a bit different to previous years and exchange rate turbulence was challenging different industries in the first weeks. The government announced the unified currency on 42000 IRRs but in unofficial markets are active with over 50000 IRRs exchange rates.
Exchange rate turbulence have impacts on tire industry
Exchange rate fluctuations will have effects on the auto industry and especially imported vehicles, but it would certainly have impacts on other related industries and certainly one of them would be tire industry.
"We used exchangeable currency of 37000 IRRs and now fluctuation had made the exchange rate unified on 42000 IRRs. This increment had impacts on all industries and there is not an exception.” Said Mohammad Reza Ganji, chairman of the tire industry association.
"Market’s request will be more in the future, so offer should increase. By opening new tire production units in the next 4 or 5 years, the share of local tires won’t change in the market and it would be 70 percent domestic tires and the rest is imported products. The new production units just handle the future request.” He added regarding to the ministry of Industry, Mine and Trade decision for opening 4 new tire factory with the cooperation of IDRO.
Localizing all products is not economical
"Sometimes we must import products because we are not producing them in Iran. For example, mining tires and special tires are not used a lot annually and producing them in the country is not beneficial. There are some companies in the world, producing these kind of tires and export them to all over the world.” He continued.
Export and tire industry need stability
"we had a commercial vision about their industry and always exporting to neighboring countries. Yazd Tire have a license of Netherland Vredestein and they are exported to Romania which is a great achievement for Iran’s tire industry.” Said the chairman of the tire industry association.
The government must replace exhortative policies with encouraging policies
"We need stability like other industries. If the dollar is going to be 42000 IRRs, so we have to have stability to think and plan about the future. For exporting we need to make some infrastructure and in would be sensational so reduce and raise prices would destroy the bases. We have to think about this issue. Exportation won’t increase by rising dollar price and its result would be artificial. This will lead the country toward lower international interaction.” He said.
In the year of "support for Iranian products” the government should reconsider about it procedure of supporting industries like tire, which is working high in local and foreign markets. They should defend industries in front of exchange rate fluctuation. Other industries should try to be more active with high quality materials and final products.
Khodrocar Reporter: Sepideh Ghazi Zadeh
Khodrocar Translator: Amin Zamani