Product Development with 40% of Sales Revenue Dedicated to Research and Development

Allocating 3 to 5 percent of car sales revenue to research and development in is planned in "Iran 2020 Vision" document while the industry is currently suffering from a lack of product design and development and the only way to improve this situation is to pay particular attention to research and development.

A look at the parts import statistics shows that the bulk of these imports are now raw materials, and in such circumstances the result of using R&D units, especially for raw material producers, would be to find effective raw materials.


There exists a negligence in research and development in the automotive industry, especially in the part industry; according to industry activists, the world now spends $114 billion annually on research and development in the automotive industry, while the ratio of research and development to added-value in Iran automotive industry reaches to only 1.2%. In the meantime, the question is: What is the reason for this neglect?


Mohammad Reza Dehghan, director of the Crouse Manufacturing Research and Innovation Center, emphasizing that the automaker does not allocate funds to research and development of part makers says: "In fact, the part maker will produce on the basis of the component that must be supplied and allocate from the sales profit to research and development."

He adds: " Part of the research and development budget goes to the manpower and space allocated to him/her, and part of it goes to R&D equipment, which is expensive and if we want to have progress we need to have these equipment in order to be able to move forward."

The director of the Crouse Manufacturing Research and Innovation Center, mentioned that the amount of funding depends on the amount of production, and said: "If production is increased, the percentage of budget allocation will also increase, and vice versa. Because the cost is a certain amount."

Dehghan pointed out to the actions taken by the center in previous years and said: "Since the 2010s the research center was set up in the [Crouse] company, and a year and a half later the products were ready to be marketed, but it nevertheless took time to be prepared to produce all the products and offer different generations of products which took 4 years to complete.


"What is on the market is policy defined by the automakers and the design of the parts is based on the needs of the automaker," he says. "A look at the activities of major companies such as Bosch, Siemens and Continental also shows that these companies do not produce small parts but that specific companies are required to produce these parts and well-known companies only put together these small parts to produce the final product."

Emphasizing the fact that by relying on research and development we are capable of producing all the modern parts of the world, the director of the Crouse Manufacturing Research and Innovation Center said: " The design and production of the parts are based on the needs of the automaker; lack of attention to research and development in the part industry also has many reasons, one of which is the lack of funding by the part makers as well as the automakers."