TEHRAN- A recent report by the Iranian Parliament’s Research Center on the automotive industry reveals that 926,000 vehicles were produced in the past Iranian calendar year 1404 (ended on March 20), marking a 17.4% decline compared to the previous year.

According to IRNA, the overall status of production, imports, exports, and scrappage of obsolete vehicles, as reflected in the Parliament’s Research Center report, shows that vehicle production in 1403 stood at approximately 1,121,000 units, while the figure for the past year fell to 926,000 – a drop of over 17%.

Although this production decline has various causes, the most significant factor is supply chain disruptions and various imbalances in recent years.

According to published statistics, imports in 1404 reached about 67,000 units, indicating a 6.3% growth compared to the 63,000 vehicles imported in the same period of 1403.

Export value in 1404 also experienced a 48% decrease compared to 1403. In the past year, the value of exports in the automotive and parts industry stood at approximately $65 million, whereas this figure was about $126 million in 1403.

The scrappage of obsolete vehicles in the past year totaled 204 units, compared to 350 units in 1403, reflecting a 41.7% decline.

The 14th government’s policy is to accelerate the scrappage of obsolete vehicles. In this regard, the Organization for Development and Modernization of Iranian Industries (IDRO) has been tasked with implementing this plan. With the recent amendments to the executive regulations of Article 10 of the Automotive Industry Organization Law, it is expected that the country’s annual scrappage capacity will exceed 350,000 units.

One of the most significant changes in the new regulations concerns Article 15. Previously, for every 12 vehicles produced, one vehicle had to be removed from circulation. However, under the new amendments and based on the note to Article 10 of the law, this ratio has been changed to one vehicle for every four vehicles – meaning automakers must offset 25% of their monthly production through scrappage of obsolete

Additionally, in the imported vehicle sector, hybrid vehicles have been granted a 50% exemption, and domestically produced electric vehicles have received a 100% exemption from scrappage fees, in order to facilitate the entry of clean vehicles into the country.

Providing financing facilities for scrapping obsolete vehicles can also contribute to the modernization of the transportation fleet, reduction of air and environmental pollution, and improved fuel consumption management.

EF/MA