Iran Targets 80% Auto Localization

Asre Khodro: The Iranian government has targeted an automotive localization rate of 80%, following several overseas evaluations of the quality of domestic components, reliable sources close to car producer SAIPA, Iran’s second largest car company, said.

Sunday 09 October 2016 - 13:33:00

Iran Targets 80% Auto Localization

Reporting "Asre Khodro", Iranian automakers have long focused on boosting the quality and capacity of auto parts manufacturing, instead of relying on foreign producers. This was strengthened during successive years of western sanctions imposed on the country, with the government increasing support for local parts makers as of 2013. 

Iran’s Minister of Industries, Mining and Trade Mohammed Reza Nematzadeh recently told British magazine Just Auto that a minimum automotive content would start at 40%, but the goal is to raise this across the industry to an eventual 80%.

The move has been welcomed by observers with knowledge of SAIPA, which only last week concluded a production deal with Citroen to produce several new vehicles in Iran.

“French automakers evaluated parts makers in Iran and estimated their capacities,” the source said.

According to the source, Pars Khodro, a subsidiary of SAIPA, is capable of producing parts and has been doing so for the parent company for several years.

“We have evaluated and accredited our parts makers. Right now they [Citroen] have assured 40% of cars can be produced with high quality and probably they are evaluating more parts makers to increase localization,” the source said.

The 50/50 SAIPA-Citroen joint venture will cover the entire value chain, from the design stage through to vehicle marketing. Manufacturing will take place at the Kashan plant in Iran, which will be 50% owned by the PSA Group.

The JV will invest more than €300 million ($329 million) in manufacturing and R&D during the next five years, with the agreement reinforced by technology transfers and a significant level of local content. It will take effect after the signing of the final agreement scheduled for late 2016.

The first Citroen vehicle is expected to roll from Pars Khodro’s Kashan plant in 2018.

It appears that the French side is largely financing the deal that will use SAIPA’s plant and workforce, while Citroen will bring its automotive expertise to bear with the new products.

“After the Islamic Revolution in Iran, there has been a very good relationship between SAIPA and Citroen. We have produced several cars from Citroen,” the SAIPA source said.

“Citroen would not let us produce any of their models unless they were confident of the product’s quality.”

With its three world-renowned brands, namely Peugeot, Citroen and DS, the PSA Group sold 3 million vehicles worldwide in 2015. The second largest carmaker in Europe, PSA Group, recorded sales and revenues of €54 billion in 2015.

The group confirmed its European leadership in terms of controlling carbon dioxide emissions to an average of 104.4 grams of carbon dioxide/km in 2015.

Founded in 1966, SAIPA is the second-largest car manufacturer in the Middle East and North Africa, and one of the 20 largest automakers worldwide. With a 40% market share in Iran, the company exports its products to 21 countries, leveraging manufacturing facilities across the four continents.



برچسب ها

Iran Automotive Industry
مطالب مرتبط بیشتر
Construction of Chinese-Persian car in Semnan France to update firms on doing business with Iran S. Africa-Iran Business Forum Next Week Iran, Turkey to Hold Meeting of Joint Economic Commission Next Month French Businesses, Officials to Preempt American JCPOA Walkout Lack of Iran Khodro Capital Impedes Peugeot Plans Auto Parts Makers Demand Tougher Regulations on Imports Istanbul Automechanika Conference with the participation of the senior director of the exhibition European carmakers on the road back to Iran after nuclear deal Car from the new minister's perspective Iran Automakers Need Logistical Spread Iran Auto Output: All That Clamor for Naught French Leverage in Iran Auto Industry Iran Industrial Agency Kicks Starts Another Car Factory Iran Automotive Production Up 20% y/y With Sanctions Behind, Iran Looks Ahead Iran Carmakers Obliged to Offer 2-Year Guarantees Iran Auto Companies Not Raising Prices Iran to hit two car industry accords soon Turkey keen on investment in Iran's auto industry PSA to carry out Iran plans despite US threats Peugeot, Citroen Will Uphold Localization Segment in Iran Iran to release Euro V passenger cars next year Production surges in Iran's car industry Iran Khodro Group Retains 39% Market Share Iran to sign 5 auto deals with intl. companies by Mar. 20 Iran talks with Germany’s VW to produce passenger car Car Import only through Investment Iran’s Vehicle Initial Quality Study Released Iran has potential to be top-10 auto market by 2020 Iranian, Turkish companies discuss auto parts Coop. The 4th Vehicle Conference "Sales and After-sales Service Approach” Iran Car Sales Slump Despite Loans Iran’s Auto Import Report by MSD Effects of Automotive Ties With China Faurecia builds on Iran ties to secure major deals - CEO Renault signs MoU with Iran to create new joint venture Peugeot to try for making Iran its manufacturing hub in Middle East, Africa Iran to ink new deals with foreign automakers Pakistan-Iran cooperation in auto sector discussed Iran to open car factory in Azerbaijan Auto Sector Recovery to Buoy Steel Consumption New Automotive Decisions Announced Iran's Automotive Advantages Friends with many benefits Encouraging foreign investment to revitalize Iran’s car industry - expert Iranian car output down 2.5% Y/Y Algeria-Iran: 15 cooperation and agreements for automotive industry Automotive Targets Highlighted How to seize Iran’s automotive opportunities VW In Iran Iran ranked 13th in world passenger cars sales of 2015 Bavaria eyes major auto supplier potential with Iran Plans Devised to Make Iran Region’s Top Automaker: Minister Iran Seeks Foreign Partnerships to Boost Auto Industry Volvo on the Final Decision to Manufacture Car in Chabahar 3rd Iran Automotive Industry Int'l Confab opens in Tehran Iran Inks 3 MoUs with Foreign Carmakers Iran signs three deals with foreign automakers Iran to become a hub for automotive manufacturing: OICA President Iran, Germany Ink MoU to Boost Cooperation in Automotive Industry How Iranian Cars Are Viewed Around the Region Peugeot to Compensate for Iran’s Losses in New Contract: Minister Minister Calls for Japanese Automakers’ Investment in Iran Iran seeking Japanese investment in autos, water Iran in Talks with Germany, Italy to Boost Cooperation in Automotive Industry Three Europe carmakers to return to Iran soon Iran to become world's 8th automotive manufacturer Iran suspends car loan programme on soaring demand Iran to export 30% of domestically produced cars French firms trail in economic rush to Iran - executive Iran interested in cooperating with German, Italian carmakers Nematzadeh defends automotive sector Changing Automotive Perception Italy to broaden cooperation on auto industry with Iran Iran: The next automotive hotspot in Middle East? Iran's car market ready to zoom in on the action Japan explores opportunities in Iran's auto industry Thailand hopes for boost in trade with Iran after sanctions get lifted
Back to top