Q: Please give our readers and outline of the IAPMA and its role in the Iranian auto-part industry.

A: Thank you. The IAPMA has been the first all-industrial group to form, following the 1995 Vehicle Conference, free from any political orientation. It was established to defend the industrial interests and rights of its members, identify talented people, gather figures and information related to the industry, help win the confidence of its members and finally provide them with timely and accurate information for future planning and policy making. It helped IAPMA to persuade making calculated decisions.

Regarding our organisation and the services we provide to our members, the IAPMA has activated several special committees as:

• Education and Research Committee;
  
• Financial, Legal and Tax Committee;
  
• Arbitration Committee;
  
• Publications Committee;
  
• Export Committee; and
  
• Technical Committee.

They help to provide financial support to our members, and to replenish their thin budgets, which has been among the most important problems our auto-part manufacturers face. Considering the existing demands from the association, we approached the Central Bank of Iran (CBI) to endorse our plan to establish a private bank, which can hopefully provide our members with timely credit and financial help.

For international relations, the IAPMA has established working relationships with respective associations and societies in France, Turkey, and India, and has signed memorandums with them for lasting co-operation and to exchange information. We therefore hope to encourage foreign industrialists in near future to participate in joint ventures with Iranian counterparts to co-manufacture auto-parts. In this regard we've had meetings with the Austrian Association of Auto-part Manufacturers and we expect that Austrian manufacturers to participate in the International Auto Show in Tehran next summer. Other programmes include holding seminars, participating in joint Iranian commissions with other countries, attending international auto shows such as Auto Mechanics Show in Frankfurt and Auto Part Manufacturing Shows in France and Turkey.

In education/training, the respective committee provides in-house training, and holds training and refreshing training courses in the provincial capitals, using foreign experts, and also helps to update our managers' knowledge of latest management methods.

Concerning quality assurance management, recently we've held talks with a renowned European organisation to help prepare over one hundred factories in Iran for ISO-TS, QS 9001 auditing. On the other hand, exploiting its close relationship with Iranian Ministry of Industries and Mines' Small Industries Organisation, the IAPMA has secured a deal with this organisation to share the training costs.

In the academic level, we have a plan with two of Iran's major universities to hold private training courses for our member companies' personnel. As part of this plan, a group of technical and management staff from part manufacturing companies are going to enrol, with IAPMA's endorsement, in higher education courses without having to pass any entrance exam. However, they'll return to their companies upon completion of their study.

Q: How many members does IAPMA have? And what benefits does the IAPMA provide to its members?

A: So far the IAPMA has reviewed over 640 membership applications, of which 516 have been accepted. These figures show a marked increase in confidence towards our efforts.

It is worth mentioning that despite our short life of not more than six years; this association is undoubtedly one of the largest, if not the largest considering the number of members, and most active private associations in Iran. Membership here has no special privilege, or prerequisite to use government resources attached, and joining it is for nothing other than managers' awareness of the need to support such organisations. As a result such a level of interest is of special value to us.

Q: In your view what is the prospect of auto-part manufacturing in Iran?

A: As you might know, the auto industry in Iran has around half a century of history, began by assembling Jeep vehicles in Iran in 1957. During 1960's a trend started in Iran to establish assembly lines for various cars, buses, and trucks. For example Fiat, Iran National, Moratab Industrial Mfg, Zamyad, Iran Kaveh, General Motors, and Mazda could be singled out, many of which still operate under new names and management.

During 10 years of 1979 to 1989, which were the recession years in the Iranian auto industry, diverse ideas came into the minds of decision-makers, all facing this challenge that whether auto manufacturing should be supported or scrapped; and whether instead prioritisation should be given to other sectors such as agriculture and other industrial fields, with vehicles being imported from abroad. This uncertainty forced our flourishing auto industry into standstill. But immense investments made on Peykan production, internal events, changes concerning the foreign party providing Peykan parts, domestic demand, and then political condition forced officials to resume its production line. But this time a path was chosen to help boost indigenous manufacturing capability with the aim of replacing imports in the longer term.

Circumstances following the end of Iran-Iraq War, our economic condition, the need for more new investments, employment, and perhaps the most important - eight years of "forced production" by the industry to support the war effort, prepared the ground for a self-induced drive towards development of auto industry in Iran and manufacturing of parts, which had been draining the oil revenues since many years earlier. In the winter of 1992 the Iranian Parliament passed the National Vehicle Act, which helped to define the shape of the auto industry in Iran. Beginning from the 1993, this self-esteemed drive thrived with more determination and planning than ever, yet in a smarter way.

Investment made, both in national and in foreign currencies, during this period - most of which by private sector and the rest by the government - saved an average amount of US$750 million annually for five years by replacing imports, while ill-devised policies of auto builders to monopolise the auto-part industry, slowed down its progress. Nevertheless the movement of continued investment and aiming at international competitive markets, was blocked, namely, to keep prices competitive by creating parallel investments, fragmenting an already fragmented (in the millions of global scale), and sponsoring new inexperienced manufacturers.

Taking the latest figures from the 1998 survey by IAPMA of 119 member companies, an equal to the total invested capital had been dedicated to development, while the management policy of the auto industry in Iran during the last three years, frustrated all the existing hopes. An industrialist who was about to reach a level of confidence after half a century of valued experience that "he can manufacture," knows how to manufacture, knows its problems and shortcomings, and knows how to address them. He understands the benefits of joint venturing with foreigners, license obtaining, creating quality assurance management systems, spending to increase quality, and the need to pay the costs of entering international markets. But he's so preoccupied with financial problems, contract renewal refusals, and his unknown future that will never be able not only to reinvest, or to choose suitable foreign partners, and plan for export, but on the other hand prefers to get out of this incongruent scuffle as soon as possible.

However, what our part manufacturers have done so far during this short period, deserves attention and more thought, because the buoyancy of starting to manufacture auto parts; some having a hundred years of history on their back, with 100% domestic capital and technical know-how, is by no means a simple task. Our part manufacturers began by reverse engineering, and during 5 to 7 years moved forward shoulder to shoulder with our vehicle manufacturers and help them increase their production capacity to a level that they currently support a 360,000-vehicle annual output rate, comparing to less than 40,000 in early 1990's. Despite all the shortcomings, currently several of our manufacturers have foreign customers, and others are negotiating with potential European buyers. This is the valuable fruit of years of hard work.

Currently, our auto-part manufacturing industry is passing from production and capacity building, to quality production and export. So far our part manufacturer has passed the hurdles of manufacturing, and now eyes the help of world-class manufacturers - in the form of transferring technical know-how, joint venture and etc. - to reach world-class levels of quality and capacity. Our country's auto industry plans to reach a production level of 750,000 by 2007. Therefore we intend to not only provide our domestic demand for parts with international standard quality, but also increase our production capacity and output to enter export markets.

The Iranian Auto Part Manufacturers Association feels obliged to identify foreign companies interested to do business with its members, and to have them sit at a single table for some serious talks.