France carmakers striving to return
French carmakers have embarked on fresh efforts to resume their business in Iran, as the Islamic Republic and six world powers start decisive talks for a final nuclear deal.
“Efforts are already underway to help French entrepreneurs lay the ground work for resuming business with Iran,” France 24 said in a report.
It said leading French carmakers Peugeot and Renault are eager to retain their Iran market where they “used to sell upwards of 500,000 vehicles a year” before the United States and the European Union toughened sanctions against the Islamic Republic in 2012.
The French television said a final nuclear deal between Iran and the world powers would lead to the lifting of sanctions against Iran, subsequently “opening the door for Western firms to tap into the potentially lucrative Iranian market”.
It said the French firms are facing tough rivalry by US giants such as Boeing, Chrysler and General Motors.
Last month, Renault’s Chief Performance Officer Jerome Stoll said the French carmaker is willing to resume vehicle assembly cooperation with Iran’s automakers Iran Khodro and Pars Khodro.
Representatives from Iran and P5+1 (the five permanent members of the UN Security Council plus Germany) on Thursday officially opened the sixth round of nuclear talks aimed at striking a comprehensive nuclear deal over Iran’s peaceful nuclear work.
The two sides have been discussing ways of ironing out their differences to achieve a final deal that would end the decade-old dispute over Tehran’s nuclear energy program. They signed an interim accord in Geneva, Switzerland, on November 23, 2013.
SAIPA to manufacture South Korean cars
South Korea’s KIA and Iran’s SAIPA have struck a deal to manufacture South Korean cars in Iran, SAIPA Director General Saeed Madani said.
KIA Cerato will be the first Korean car to be manufactured there, Vestnik Kavkaza reported.
They will have engine volumes of 1600 and 2000 cubic centimeters, manual and automatic gears. Ceratos will most likely enter the market by the end of the year (by March 20, 2015).
In Madani’s words, SAIPA has also negotiated cooperation with other foreign car manufacturers.
A new council chaired by Mohammad Reza Nematzadeh, minister of industries, mines and trade, meets twice a month to discuss automobile reforms. There is already a slight improvement in production: despite the overall decline, figures over the past quarter almost equaled those of the preceding six months.
But while there are positive signals and huge potential—there are 14 million cars on Iran’s roads, half of which are dilapidated.
Unofficial estimates put the sector’s debt to Iranian banks as high as 100 trillion rials ($4 billion).
“The pressure that banks exert on parts makers is far bigger than the Tax Organisation,” said Farhad Behnia, a member of the Iranian Auto Parts Manufacturers Association.
“Out of 860 members of the association, 20 percent have shut down their factories. Everywhere in the world, governments decrease bank rates to support producers,” he added.
The crisis for Iran’s car producers is exacerbated by the effect of high inflation on the purchasing power of Iranian consumers. The cost of a Kia Pride—the South Korean car that accounts for up to 40 percent of vehicles on Iranian roads—has risen from 75 million rials ($3,015) two years ago to 180 million rials ($7,238) today due to the 50 percent drop in the value of the rial caused by the sanctions.
“Demand has gone down by 35-40 percent because many people cannot afford to buy a car any more,” said Saeed Laylaz, an economic analyst.
Working group to boost capital market
Domestic Economy Desk
Majlis Speaker Ali Larijani has appointed a working group consisting of representatives of related commissions to investigate strategies for boosting the capital market in the short-, medium- and long-term.
Larijani made the statement in a meeting with Managing Director of Stock Exchange Organization Ali Salehabadi.
“The Parliament must seriously consider all-out development of Iran’s capital market,” he said.
Larijani said the Majlis is ready to take steps for legislating supportive laws for the capital market with the government’s support.
“Over 7 million people are active in stock exchange,” Salehabadi said, “and the government’s supportive attitude toward capital market and care for the problems facing stakeholders and investors will certainly have a positive influence on expanding the market.”
The two sides also discussed reasons behind the sharp drop in Tehran Stock Exchange Index (TEPIX) and concerns of stakeholders.
1,000 road tankers will join fuel transport fleet
Domestic Economy Desk
By late July, 1,000 new road tankers complying with European standards will join the country’s fuel transportation fleet, said an official from the National Iranian Oil Refining and Distribution Company (NIORDC).
Abbas Filsaraei, an NIORDC deputy director, put the total capacity of new tankers at 35,500 liters, which is 10 percent higher than the old model’s capacity of 32,272 liters.
“By importing these new tankers with greater capacity, NIORDC will be able to reduce the number of tankers on the country’s roads, reduce fuel consumption and increase fuel transportation and supply,” he said.
The official said road tankers are produced domestically according to European standards.
Filsaraei added that domestic road tankers are also equipped with latest systems such as anti-overturn stabilizer.
In a Monday interview, Filsaraei said Iran owns the largest fuel transportation network in the Middle East.
He noted that the average age of Iran’s tanker fleet almost equals that of the European countries.
The official said fuel is transported in Iran by road tankers, tank wagons, tanker ships as well as through pipelines.
“Nearly 10,000 tankers from 400 private sector companies transport fuel by road,” he said.
In the last Iranian year (ended March 20, 2014), nearly 87 billion liters of fuel were transported by Iranian tankers, showing a 3-percent year-on-year growth.
Iran’s tank wagons and ships transported 3 billion liters and 8 billion liters of fuel, respectively.
Economic improvement on gov’t agenda
President Hassan Rouhani said improving the economy is among the most important priorities of his government.
Addressing his cabinet members and the Iranian governor generals in Tehran on Wednesday, Rouhani said the main priority of the government this year is to bring about economic boom and getting rid of inflationary recession, Fars News Agency reported.
He also underlined the full and timely implementation of main projects approved during his provincial tours.
Rouhani noted that the government encourages investment and entrepreneurs in the industrial sector to help boost national products.
Also on Wednesday, Economy Minister Ali Tayyebnia predicted that the country’s economy would witness an eye-catching growth in the coming months and said the perspective of private and foreign investment in Iran is also bright.
“The inflation rate has decreased. The government has envisaged a 25-percent inflation rate for the current (Iranian) year (ending March 20, 2015) and due to the successes that we have gained in recent months, attaining this goal is possible,” he said.
“Our prediction is that recession will continue to decline and the trend of economic growth will become positive in the current year.”
Tayyebnia stressed that international bodies, including the International Monetary Fund and the World Bank, have also voiced optimism about the new Iranian government’s policies.
“The perspective of the private sector’s investment and foreign investment is also highly bright and promising,” he said.
The Central Bank of Iran announced in June that the country’s inflation rate has decreased by 9.8 percent since the administration of President Hassan Rouhani took office in August 2013.
Call for Azeri companies’ more active role in Iran
Azerbaijan’s Minister of Communications and High Technologies Ali Abbasov invited Azeri businessmen and companies to play a more active role in the Iranian market.
Speaking to reporters on Thursday, Abbasov referred to his recent visit to Iran and said the ground for the active role of Azeri entrepreneurs in Iran has been prepared, IRNA reported.
“During the visit, he exchanged views with Iranian officials on ways of developing economic cooperation between the two countries,” he said.
The Azeri minister and his entourage visited Iran on June 17-18 at the official invitation of his Iranian counterpart Mahmoud Vaezi.
Iran’s First Vice President Es’haq Jahangiri earlier said amicable ties between Tehran and Baku necessitate bigger efforts by both sides to boost their trade transactions.
“The low volume of trade exchange (between Iran and Azerbaijan) does not match the friendly and brotherly relations between the two countries and it is necessary that major strides are made in this regard,” Jahangiri said in a meeting with Abbasov in Tehran on June 18.
The visiting Azeri minister admitted that trade exchange between Iran and Azerbaijan is below expectations, but hoped that an upcoming meeting of the joint commission on economic cooperation would help raise that figure.
The next meeting of the joint economic commission between Iran and Azerbaijan is set to be held in August.
“Representatives of various ministries and relevant bodies of Iran and Azerbaijan held their previous meeting on May 3 to prepare the ground for the ninth session of the joint economic commission between two sides,” Iran’s Ambassador to Azerbaijan Mohsen Pakayeen told Tasnim News Agency in May.
Gov’t promises no inflation shock in future
From Page 1
In April, President Hassan Rouhani predicted that the inflation rate would decline to 25 percent or even lower in the current year.
“To achieve the objective, interaction with other countries is necessary,” he said.
Rouhani said the rise in prices last year was lower, compared with the figure of previous years.
He stressed that the country will continue to progress in all fields, particularly in the field of economy.
Rouhani said revenues earned last year were more than the target figure of $43 billion.
He noted that stable policies and peace are not sufficient to attract investment and encourage the public to engage in economic activities, as an economic turnabout may require a full presidential term.
“There will be some economic fluctuations this year,” he said, hoping that the second phase of the Subsidy Reform Plan will be implemented in a manner that won’t affect public life due to the slight rise in prices.
The inflation rate for the year ending March 20, 2014, was 32.1 percent, Statistical Center of Iran announced.
Ali Tayyebnia, the economy minister, said Iran’s point-to-point inflation declined to 17.6 percent in late April.
“This is while the figure amounted to 45 percent in May and June 2013, which indicates the country’s remarkable progress in curbing inflation,” he said.
The minister also said the inflation rate is mainly affected by the country’s previous economic conditions and the past government’s decisions.
“Nevertheless, in the past few months, the rate has declined remarkably,” he said.
Iran and Kazakhstan emphasized expansion of mutual trade and economic ties in a meeting between Kazakh Ambassador to Iran Amreev Bagdat Kultaevich and Iranian Minister of Industries, Mines and Trade Valiollah Afkhami-Rad.