The New Blunder of Mayor Zakani
The new blunder of Mayor Zakani on the municipal advertisement banner at metro stations, which is designed to explain and clarify the reason for purchasing products from abroad, is written in response to the question of why we bought foreign products and in defense of equipping the transportation fleet with imported products from China. It states: lower price compared to similar Iranian models, the ability of the Chinese company to meet Tehran’s needs within a six-month period, the sluggish pace of domestic car manufacturers in building the urgent and vital need for Tehran’s new public transportation fleet, reduction of air pollution in the capital with the rapid entry of the electric fleet, and reduction of gasoline consumption with electric buses and taxis in the country.
According to Iran Gate, ILNA has written that the belittling of domestic production, precisely in the years named in support of domestic production, by a public entity close to the government that gives revolutionary slogans, has been strange for many and raised the question of how much the work and labor of Iranian workers matter to various officials.
The increase in discussions about the import of some foreign products into the country, including automotive and diesel products, has become very controversial in recent days. These controversies continued to the point where the Tehran Municipality, as one of the ordering and consuming entities of vehicles and diesel vehicles like buses and minibuses, became a supporter of imports.
The discussions and debates of analysts criticizing the actions of the Tehran Municipality, including the views of Alireza Zakani, the Mayor of Tehran, progressed to the point that the advertising and cultural arms of the municipality in Tehran recently took action to defend this organization’s decision to import automotive and diesel products from countries like China by installing banners and advertising boards in environments such as the metro.
Such actions, accompanied by the belittling of domestic production precisely in the years named in support of domestic production, by a public entity close to the government that gives revolutionary slogans, have been strange for many and raised the question of how much the work and labor of Iranian workers matter to various officials.
On the municipal advertisement banner at metro stations, which is designed to explain and clarify the reason for purchasing products from abroad, it is written in response to the question of why we bought foreign products and in defense of equipping the transportation fleet with imported products from China: lower price compared to similar Iranian models, the ability of the Chinese company to meet Tehran’s needs within a six-month period, the sluggish pace of domestic car manufacturers in building the urgent and vital need for Tehran’s new public transportation fleet, reduction of air pollution in the capital with the rapid entry of the electric fleet, and reduction of gasoline consumption with electric buses and taxis in the country.
These claims, however, have mostly been refuted in interviews with some private and state-owned domestic producers. Many of these employers, because they still had contracts with some governmental organizations and some municipalities or hoped to secure contracts in the future, refrained from directly responding to these claims.
However, most of the technical and economic claims printed by the municipality on this banner have been refuted by them.
Nevertheless, we must see what the fundamental reason for such an approach is. If the issue is a type of foreign policy interaction to obtain compensation for oil sales in the form of product barter, this matter, when stated honestly, is more acceptable to the producer, worker, employer, and Iranian citizen. However, the arguments and approach, according to automotive industry analysts and labor relations, are considered a form of self-deprecation of domestic production.
Regarding this issue, some employers provide an overview for the audience. For example, Bahram Shahriari, a member of the board of directors of the Iranian Automotive Parts Manufacturers Association, regarding the recent municipal advertisements on the import debate and in response to the claims made by them, says: ‘We domestic producers, whether in the field of personal vehicles or public and diesel fleet vehicles, have the capacity and actual ability to produce and meet domestic needs, but what is lacking is management.’
He added: ‘This determination and plan do not exist in the country to meet needs from within through a pre-ordering process and by providing production conditions. We have repeatedly said and raised this issue that as long as the country’s automotive industry is monopolized by the government and the government does not allow other actors to enter its various fields, nothing special will happen in this area.’
All the shortcomings stem from this governmental monopoly in the automotive sector.
Shahriari continued: ‘Currency price fluctuations and issues like this have disrupted the work of production employers in the parts manufacturing and automotive sectors of the country.’
For example, we receive orders for bus parts with the latest quality and have the ability to produce them, but as soon as some imported or even domestic items, which are somewhat subject to the exchange rate, are ordered, we experience several price changes by the time of assembly and production, and in between, we incur losses. New taxes and various other pressures, along with this issue, have created hundreds of obstacles for production, the source of which is the government.
This automotive and parts producer continued: ‘It is not that this determination and ability do not exist in the domestic producer. Both in terms of technical and design capability and in terms of economic and industrial capacity, the country has the ability to meet all public fleet vehicle orders and all parts with domestic production.’
He emphasized: ‘The problem starts when, in the discussion of vehicle imports, a conflict of interest arises within the government and state-owned companies, and from there, production is harmed. As we see, our own large state-owned car manufacturers have also joined the ranks of importers.’
This employer activist concluded: ‘In addition to all these problems, the government and institutions support imports, which themselves have a very high volume of debt to the country’s private sector parts manufacturers and automakers. If they believe that the domestic automaker and parts manufacturer cannot make progress, they should first pay the astronomical debt of the government, subsidiaries, and quasi-governmental companies against us and then make such claims about the inability of the domestic producer.’
Shahriari, however, did not comment on the final figure presented for the government’s and state-owned companies’ debt to the country’s private sector automakers and parts manufacturers, but the last figure provided in the spring of last year was over 70 trillion tomans, which, when combined with the debt of quasi-governmental companies and other non-state automakers by mid-2024, should definitely exceed 100 trillion tomans in debt against the domestic parts manufacturer.
Despite all the problems that exist in the automotive sector, especially diesel products, the workers and the risk of their unemployment in the manufacturing companies themselves are one of the side effects of the inclination to import products with domestic counterparts, and as a result, the workers also have concerns from this perspective.
On-site observations from two diesel vehicle manufacturing companies last year show that production in most of these companies was carried out at low capacity, and recession has taken over these manufacturers, which have mostly turned into complete assemblers due to the specific market conditions.
Despite this, workers are more concerned about the country’s industry and foreign exchange resources than their own job security. Mojtaba Hajizadeh, the head of the Automotive Industry Workers Union, explains in this regard: ‘Those who were active in the 13th presidential election and later gained important positions such as the mayor of Tehran and heads of strong economic foundations came to power with national and revolutionary slogans.’
They gave slogans about the automotive industry, inflation, and production improvement, which, since they did not succeed in, they needed a promotional project to show themselves successful.
He added: ‘Some officials had a very easy view of managing automotive production in the country, and now that they have seen the difficulty and complexity of the work up close, their view has changed. Now they want to say that we want to do something in practice, and among all these ways, they chose imports.’
Hajizadeh emphasized: ‘The initial question is whether the municipality can act as an economic entity to import and contract externally when we have diesel fleet and public transport diesel products in the country. What legitimacy does a foreign contract by any municipality in the country have when it is against the leader’s macroeconomic policies?’
The head of the Iranian Automotive Industry Workers Union emphasized: ‘Every import has a profit margin for some people, and there has certainly been a conflict of interest and beneficial relationships in between that made this deal preferred over domestic production. The balance of power between the sector that profits from production and the sector that profits from imports has been disrupted, and this is a warning sign.’
This labor activist emphasized: ‘In 1999, we unveiled a number of domestically produced Jeeps at an exhibition, of which 2,100 units were produced. At that exhibition, all 2,100 Jeeps produced were pre-sold at the international exhibition, and not a single unit reached domestic customers.’
In such conditions, with this technical ability, how can the municipality claim that we did not have the technical and economic ability to produce and hindered the municipality?
Hajizadeh added: ‘If the municipality needed diesel vehicles and a transport fleet, it should have informed the responsible authority, which is the Ministry of Industry, Mines, and Trade, and that ministry, through expert work, would determine for the municipality whether vehicles should be imported for the city or if there is the possibility of producing them domestically.’
We all know that the municipality cannot have an understanding of automotive manufacturing issues and technical challenges, and there is definitely a division of labor in the country that must be respected.
He pointed out that everyone knows that domestic production, which consumes much less foreign exchange, is cheaper than foreign production. He said: ‘Our standards, our roads and streets, and the shape of the interior cabin of our wagons and buses in heavy passenger transport are completely different from other countries, and our domestic diesel industry is fundamentally shaped to meet the needs of this specific market form and has become accustomed to producing for specific fuels, designing the product accordingly after much experience and trial and error.’
In such conditions, what logic justifies reinventing the wheel from scratch?
The head of the Automotive Industry Workers Union stated that for the automotive mafia in the country, the issue of employment of the domestic workforce does not matter. He expressed doubt that, given the social and security consequences of laying off 250,000 direct workers of state-owned automakers in the country, anyone would have the ability or courage to bring down the massive Iranian automotive industry, but weakening the workforce, especially in the diesel vehicle sector, is not justifiable.
This labor activist acknowledged that municipal officials made promises to the people that they could not fulfill, but now they intend to show themselves by blackening and self-deprecating domestic production. They may continue to give populist and deceptive slogans that we wanted to import, and the automotive mafia did not allow us to meet the city’s needs, although this claim is irrelevant given the current power of the municipality.
He added: ‘In the entire Middle East, North Africa, the Indian subcontinent, and Central Asia, the only country that has the automotive industry from the design and parts manufacturing stage to assembly is our country, Iran. Over these seventy years, there has been dissatisfaction with the automotive industry, but our people are not opposed to the destruction of this long-standing and robust industry, and most people’s dissatisfaction is due to the high and illogical profit margins of our automotive products.’
We have fulfilled the domestic need in the automotive and diesel sectors at our level for years and have put in our effort.
Hajizadeh emphasized that among various global competitors, due to sanctions conditions, we were forced to choose China. He said: ‘Due to China’s veto power and economic strength, we are compelled to choose this foreign seller, and we probably have to barter products in exchange for oil.’
This is while domestic vehicles are both cheaper and, unlike foreign models, have much cheaper and domestic spare and accessory parts. Among officials, they must choose to focus their foreign trade share with China in this area or spend it in another area.
This labor activist concluded: ‘For diesel vehicles, especially buses, for every imported unit, seven complete sets of spare parts for the same vehicle, such as mirrors, screws, handles, and according to standards, must be imported into the country. This is while if purchased domestically, all these parts would be completely produced internally without the need for imports, and foreign exchange would not leave the country.’
The pain is that when criticism is directed at the advertisement billboard, even the entities of this municipality do not ultimately consider themselves responsible for offending our domestic production. Tomorrow, if the imported second-hand electric buses from China turn out poorly, the Tehran Municipality itself will not be accountable.
