Parallel Salam Securities for Financing Auto-Industry

Auto industry is a strategic industry, as it constitutes 5 percent’s of the GNP, holds relatively more jobs than other industries and deals with the economic life of more than 5 million people. Financial development of this industry will lead to the revivification of other industries. Ignoring this industry might make the achievement of Islamic Republic of Iran’s long-term development goals impossible. Hence, financing this industry is a major concern for policy-making and administrative bodies in Iran as well as automakers themselves.
Using descriptive-analytical method, this research uses library resources for proving the hypothesis that “according to financial and economical criteria, standard parallel salam securities can be effectively used as an instrument for financing Iranian auto industry”. Findings show that salam securities can be a proper instrument for financing this industry, since it accords to microeconomic criteria, such as conformity with customers’ and investors’ goals and motivations and the degree of liquidity and efficiency. However, about macroeconomic criteria, such as influencing economic growth and development, distributional justice and the ability of monetary and financial policies, the success of salam securities will depend on a proper policy-making.