The Iranian government is planning to sell its shares in large automotive companies in the country, a move it deems necessary to create competition and to boost quality of home-made cars.

Iranian deputy industries minister Manuchehr Manteghi said on Saturday that the government had set an ultimatum of six months for the ministry to finish divestment of shares in large carmakers, including in two leading companies the IKCO and Saipa.

Manteghi said the divestment will in line with a series of reforms ordered by Iranian President Ebrahim Raeisi in February to improve the situation in the country’s car manufacturing sector.

“We have taken the initial steps and all obstacles have been identified and we are moving to remove them,” said the official, adding, “The divestment will take place over the anticipated time.”

However, authorities in the Iranian Privatization Organization said on Saturday that the IKCO and Saipa will need to unlock a significant part of the shares they have put as collaterals for bank loans before they can go public.

Experts say privatizing the two companies could face other obstacles, including issue with transparency of financial statements.

The IKCO and Saipa account for a bulk of nearly one million cars that are produced inside Iran ever year. Output at the two companies has been consistent over the past years despite issues with parts supply and foreign sales because of American sanctions.

Complaints about safety of domestically produced cars prompted concerns earlier this year and forced the government to introduce a series of reforms in the industry.

Source » presstv