Baku, Azerbaijan, May 18
By Fatih Karimov - Trend:
Iran's car production line in Algeria to be inaugurated by March 2017, Mehdi Jamali, CEO of Iran's second giant car manufacturer Saipa said, IRNA news agency reported May 18.
The project is aimed at boosting Iran's auto export, Jamali said, adding that Algeria is Africa's second big auto market after South Africa.
Last December, Iran's Saipa and Algeria signed a Memorandum of Understanding (MoU) to jointly produce cars in the African country.
The contract's value is about $50 million, Jamali said, explaining that almost $16 million will be invested for implementation of the project at the first stage.
The plant also needs some $33 million of working capital, Jamali said.
Finally, about 20,000 cars are targeted to be annually produced at the plant which needs $300 million investment, Jamali said.
Saipa's share from the joint venture is 25 percent, and the Algerian side owns the remaining 75 percent share, he added.
Saipa's five sedan models will be produced jointly with Algerian counterpart, Jamali said, without mentioning further details about the Algerian company.
Saipa has also established car production plants in Syria, Venezuela, Iraq and Sudan, he noted.
Jamali underlined that by establishing joint product lines, Saipa eyes to export engineering and technical service to various countries, besides car parts.
Earlier in 2008 Saipa signed an agreement with Algerian Rahmun Industrial Group for establishing an assembly line in the African country.
About 15,000 cars were expected to be produced annually in the first phase, however the agreement was not realized.
It should be noted that Iran and Algeria signed 15 memorandums of understanding (MoUs) on May 17 for cooperation in auto sector and the production of Iranian vehicles in the African state.
The documents allow a number of Iranian automakers to gain a foothold in Algeria where they will manufacture cars, vans and trucks.
Along with SAIPA, other Iranian auto companies such as Zamyad Co. and Pars Khodro, signed deals to introduce their products and transfer technology to Algeria.