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Iran in need of more cars

Business Materials 27 July 2015 11:48 (UTC +04:00)

Tehran, Iran, July 27

By Temkin Jafarov, Mehdi Sepahvand - Trend:

More cars are needed in order to fulfill the domestic demand in Iran, an expert says.

The Iranian car market has a capacity of two million cars and, while Iranian car makers make about one million, still half of the capacity is unmet, therefore one million more are needed, Hassan Bananej, a car expert told Trend July 27.

Iran is situated in a very good geographical spot and there aren't good carmakers in the Middle East or North Africa, he noted.

Bananej pointed out that Iran's car making industry is the country's second largest after oil.

Iran's car making industry is over half a century old and the parts making industry is a large body.

Bananej says that good infrastructure exists in Iran and educated people in the car industry are available, giving a bright perspective to take action to improve the industry.

Iran can turn into a car production hub, and as the economic sanctions are about to be removed foreign companies have started talks with the two big companies Iran Khodro and Saipa.

Iran reached a deal on July 14 with six world powers whereby sanctions on the country are to be removed.

The expert pointed out that big names such as Volkswagen are trying to find a place in the Iranian market, adding that even American car giants are likely to come to Iran.

He said the Iranian market has a thirst for new cars which counts for the fact that Chinese-made cars are welcome in Iran.

Of course if European companies return they are better known and their products are of higher quality, Bananej said, adding that Iranians will give special value to European-made cars.

Regarding the prospects of Iran's cooperation with foreign companies, Bananej said while so far Iran has cooperated with Korean and French companies, these companies have not invested in the Iranian car industry.

"Now things are different and Iran is looking for investment and more companies are coming to Iran. Under such circumstances, Peugeot, for example, has held talks with Iran Khodro on launching a joint company. Under the contract to come out of the negotiations, Peugeot will be obliged to invest," he said.

"However, Iran Khodro seems to be more willing to work with German companies than French companies. Because the Peugeot once left Iran alone when sanctions were crippling the country. That has turned into a bad record."

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