Iran’s major car manufacturer securing firmer grip on market

Business Materials 3 February 2016 19:14 (UTC +04:00)

Tehran, Iran, February 3
By Mehdi Sepahvand -- Trend:

While Iran has opened up to the world after the removal of economic sanctions and many hope that the market will turn more diverse, the facts of the matter are otherwise.
One of the first post-sanctions contracts to be signed between an Iranian and a foreign company was a contract between major Iranian car manufacturer Iran-Khodro and the French Peugeot.

The deal envisions the production of three models of Peugeot in Iran through 50-50 venture.

"These three models are going to be a hit each as no other company can deliver them to the market at a more competitive price," Kazem Mohammadi Nikkhah, a car market businessman as well as sales and service branch manager told Trend February 3.

He pointed out that in recent months the sales have been facilitated through loans and other offers which will get the already-manufactured old models out of the store houses after a period of stagnation.

A "don't-buy" public campaign launched in mid-2015 brought the country's car industry to its knees. Following the campaign, the government had banks give loans to people to buy some 110,000 cars that were waiting customers or deterioration.

Iran-Khodro is fundamentally lined to Peugeot and the recent contract lays a good future ahead of the company, Nikkhah said.

He further pointed out that in the initial phase of the venture, Iran will import parts in the form of CKD (completely knocked down) or CBU (completely built unit).

"However," he observed, "to have a vibrant car industry we need to have a vibrant economy first."

Iran-Khodro has been manufacturing two models of Peugeot for several years, so much so that these two models have become prototypical cars in the minds of many Iranians.
The company started manufacturing Peugeot 405 around the year 2000. The production still continues. A few years later it added Peugeot 206 to its products, which is also still being manufactured. The Iranian "national vehicle" Samand is also a reshaped Peugeot 405.