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The technology that transferred to a country under a licensing agreement will supported by importer for a specific time (depends on the agreement), but the issue of managing the new used technology will be a problem for host country. In Iran, the most cases of production poor quality parts, the designed part has been developend and built up by foreign partner and when the technology demands goes down to the lower tiers in the supply chain, suppliers do not have enough knowledge and background to manage it. Development on technological issues will not occur without the skilled workforces and professional managers as a required precondition whose can deal with transferred technology and manage to maintain it. Managing the technology is not summarized in the assembly parts, but the planner should include whole value chain take account of the workforces to settle the objectives and plan to reach the international standard level of technology and the managing ability to maintain and develop it.

Supply Chain

In the current fast growth and close competition among auto manufacturers in the world, the main competitive advantages of car manufacturers lie in their supply chain. All automakers are highly dependent on their suppliers. Quality, reliability and total cost of the automobiles are base on suppliers' performance, so all automakers are so sensitive about their value chain and have their own strict regulation and indicates to select them. Iranian government also in line with the plans to support and improve national auto industry, try to help the auto part makers in several ways, investing $ 670 million in three years up to 2005 is one of governmental supports. However most of them have not reached the international standard level. (Hoshyar, Mar 6, 2005)

Size of Firms

Two main Iran automakers, Iran-Khodro and Saipa have managed their suppliers via establishing a subsidiary which is responsible for all purchasing activities. (This is a similar model to Peugeot's purchasing division, Sogedac) The subsidiary's title is 'Supplier of Automotive Parts Company' (SAPCO), and founded in 1993 and it's actively involved in design, engineering, quality and planning aspects of auto-parts. Sazegostar is playing the same role for Saipa. But apart from these two main suppliers, there are around 1200 main part manufacturers in Iranian auto industry. Some of these suppliers are well equipped and have plenty of skilled workforces, while if we investigate down the chain there are a lot of small size factories which supply the main supplier. These workshops mostly do not have high and modern technologies and are short of skilled labour.

A lot of small firms in the chain with no connection to other suppliers make the control over the value chain difficult. Quality control, technological improvement and even include them in training programs will be impossible and need a lot of investment.

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