News ID : 3582
Publish Date : 28 March 2019 - 10:03
The auto industry has passed a continuous way till now and since 1990s, most of the automakers have tried to escape from financial losses by merging with each other. This topic is getting hot and bold, these days.
Khodrocar – Major auto makers tried to compete with other companies and reduced the selling price by decreasing the profit margins. By this action they faced new challenges and forced to merge with other companies to have more share of the market and gain more profits. Merging would reduce their final price and guarantee the profit. Right now, 14 automakers are ruling the whole industry and six of them like GM, Toyota, Ford, Renault, Nissan, Volkswagen and Daimler Chrysler, have 70 percent share of global sell and spare part market.

Totally, there are 6 points for merging automakers in the world:

1-reducing the final price
2-reducing the design costs
3-reducing the competitors
4-increasing the sale’s profit
5-reaching new and potential markets
6-reducing the marketing costs

According to the president of the chamber of commerce, there are 81 active automakers in Iran that 30 of them are more famous than others and the real competition is between SAIPA and IKCO.

In this situation, production rate of little companies is very low and it will increase their production costs so they are not able to develop or cover the design costs, so merging with big companies is the only solution. Most experts think that merging in Iran’s auto industry should happen to small companies at first because merging SAIPA and IKCO which are governmental won’t solve any problems. Governmental and merging are opposite and it will increase the monopoly of the market. Right now, more than 90 percent of the market belongs to these major automakers.

Now we have to wait and see what will the 12th government decide about merge automakers and make the market more competitive and would Iran use the benefits of this action or not?
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