News ID : 4071
Publish Date : 10 July 2020 - 09:00
The proposed incentive package to deepen domestic production with 10 executive incentives was unveiled by the Homogeneous Industries Association with the aim of motivating component makers to participate in internalization tables.
Khodrocar - Since domestic and foreign sanctions along with the lack of liquidity due to delinquent claims of auto parts manufacturers and significant increase in the price of raw materials and production inputs on a daily basis along with liquidity restrictions by banks and the problem of foreign exchange supply, raw materials And internal and external semi-manufactured parts and bureaucracy are heavy and time-consuming criteria for applying for knowledge-based registration, as well as the use of fundraising and innovation fund facilities are among the challenges of the automotive industry and parts. The implementation of the suggestions of the activists in that field, who are aware of the obstacles and limitations, improved the situation.

Based on the package of incentives proposed by the Association of Homogeneous Industries, four domestic manufacturing tables have been formed so far. It became a euro. In the second table of domestic production, with the participation of 36 manufacturers, 42 other parts continued to internalize the parts during a contract worth 1.125 billion Tomans, which resulted in a reduction of 91 million Euros.

In the third table, the number of parts manufacturers' participation decreased, so that 21 domestic manufacturers made 22 parts with a contract worth 1336 billion tomans, which resulted in saving 99 million euros. According to forecasts, the fourth table with the presence of 36 manufacturers will proceed with the internalization of 55 pieces with a contract amounting to 1259 billion tomans, which according to forecasts will bring 66 million euros in foreign exchange savings. Based on this, a total of 825 manufacturers internalized 154 pieces in these tables, the value of these contracts reached 4,469 billion tomans, which has led to a reduction of 341 million euros in valuation.

Parts industry activists believe that as we move deeper into localization, the path will become more difficult and complex, so the success of this movement will need strong stimuli in the short term, and the package to encourage domestic production could be the driving force behind this.

In this regard, government incentives to motivate carmakers and parts manufacturers with the aim of deepening domestic production and incentives for automakers to encourage the supply chain and investors for domestic construction projects are two of the proposed incentives.

Accordingly, in the section on government incentives, such as allocating low-interest facilities, allocating resources of the National Development Fund, formulating tax incentives, media and advertising support, honoring and protecting intellectual property, and preventing the import of domestically made parts.

Parts industry activists believe that the allocation of long-term fixed capital and short-term working capital facilities with low interest rates for the duration of the return on investment are among the main incentives in domestic manufacturing desks because of the investment of Rials and foreign exchange to set up lines. It is necessary to produce and supply some raw materials and items needed for this measure. Also, the appropriate interest rate for these projects is proposed in order to create competitiveness in Rial facilities and a maximum of 10% in foreign exchange facilities, but of course, granting facilities equivalent to Rials is a higher priority.

At the same time, allocating part of the resources of the National Development Fund to the import of equipment, machinery and production tools instead of importing consumer goods is another government incentive. Definitely, using the resources of this fund with the aim of providing the required liquidity to supply machinery and fixed assets of the automotive industry as a propulsion industry and its important role in macroeconomics with a proper repayment period is necessary so that the necessary liquidity for fixed investment of this industry is only relevant.

Other proposed incentives include the regulation of exemptions and tax incentives in domestic construction projects for the period of return on investment. According to parts manufacturers, this support is definitely in terms of exemptions, research and targeted forgiveness in order to maintain and develop the automotive industry, as well as the government's macro policies to support production leaps and pre-determined goals to increase production circulation. As a result, in the future, while creating jobs and boosting production and reducing economic and social damage, it will lead to more tax revenue for the government.

Honoring and protecting intellectual property and judicial and legal protection are other incentives offered by the Association of Homogeneous Industries with the aim of developing and successful domestic manufacturing tables. According to the incentive, the protection of the trademark as well as the protection and recognition of the intellectual property of the domestic producer and its executive guarantee by the legislature and the judiciary to prevent damage to the intellectual property of the producer, which of course requires culture in industrial society, including these are incentives.

The last paragraph of the government incentives also emphasizes on preventing the import of parts that have domestic production to the extent of domestic production capacity. Given the importance of preserving foreign exchange reserves in the current situation and its targeted allocation to support the flourishing of domestic production, especially to prevent the collapse of the automotive industry, It is important.

In the continuation of this package, the incentives of car manufacturers have been mentioned, so that buying at the cost price is equivalent to importing at the beginning of the work and reducing the long-term price, including these incentives.

At the suggestion of the automakers, the automaker will enter into a contract with them at the LANDED PRIXE rate. All over the world, in order to reach the target price, in order to prevent the outflow of foreign currency from the country, sufficient motivation to invest domestically and cover capital expenditures should be achieved.

At the same time, cash purchases of parts delivered for a period of at least one year are among the other incentives for automakers. Like other contracts, it takes time.

A fair contract and a guarantee of a return on investment with just one supply source for each piece are other demands of the parts manufacturers to better implement home-made tables. According to them, the automaker will purchase the parts in the form of a win-win and two-way contract for the entire period of the project capital return period and with the promised circulation, and during the contract period will work with only one source of supply to be a motivation to invest and localize.

The automaker's participation in the fixed investment risk of projects is also the last incentive that the component maker considers necessary for domesticization. According to car industry activists, due to the newness of projects and parts, the need for high investments for the production of special products that only the automaker buys, so it is better for the automaker to invest in fixed investments by pre-purchasing parts and depreciating in The duration of the contract, the purchase of molds and special tools and equipment for production and delivery to the manufacturer, taking into account the full cost of depreciation of technical knowledge, machinery and equipment based on participation capacity.

Participants believe that in addition to implementing these incentives, any parallel work with institutions such as the military industry that has entered the automotive industry should be prevented and these industries should not become a competitor for the private sector, but the military industry should use its multi-year technical knowledge for better use. Make it available to component makers. Participants believe that in addition to implementing these incentives, any parallel work with institutions such as the military industry that has entered the automotive industry should be prevented and these industries should not become a competitor for the private sector, but the military industry should use its multi-year technical knowledge for better use. Make it available to component makers.

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