Khazar Car Company, an automotive joint venture between Iran Khodro and AzerMash OJSC, is mulling exports made in Neftchala, 168 km south of Baku, to Russia and Georgia, said the Azeri deputy minister of economy and industry.
Niyazi Safarov told the media Friday, “Talks are underway to start exports of vehicles jointly made by Iran and Azerbaijan in Neftchala to Russia and Georgia,” IRNA reported.
“Car markets of the two countries are being studied to gauge demand for vehicles made through the joint venture,” he said. The Dena sedan designed by IKCO is produced at Khazar car factory.
According to Safarov, “In addition to addressing needs of the Azeri auto market exports have always been on the joint agenda.”
Earlier, vehicles bearing the logotype of the joint venture, “KH”, the initials of Khazar, were showcased at Moscow International Auto Show (MIAS 2018) held between Aug. 31 and Sep. 9.
Safarov said many Azeri state bodies have already purchased and preordered cars made through the JV.
The project between IKCO and AzerMash was conceived in 2016 and 24 million Azeri manats ($14 million) have been invested in the project. According to reports, 75% of the investment has been put up by the Azeri company.
Georgia has a single automotive company Kutaisi Auto Mechanical Plant, which makes commercial vehicles. According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), 3,614 imported cars were sold in Georgia in 2017.
This is while Russia has several automotive companies that produced 1.34 million cars in 2017. OICA said 1.39 million vehicles were sold in the country last year.
Khazar Car Company apparently has a better chance of claiming a share of the Georgian car market compared to Russia.
> Mutual Ties
Khazar factory was launched in March 2018 during a state visit by President Hassan Rouhani to Azerbaijan. He was accompanied by his Azeri counterpart Ilham Aliyev during the inauguration who commended the JV as “a manifestation of Iran-Azerbaijan relations.”
With initial annual production capacity of 10,000 units, Khazar has said it will increase output to 15,000 units.
The models manufactured at the factory are budget cars popular in Iran, among which is Dena, and an upgraded version of the model Dena+.
Production of Dena began in 2013. The vehicle is built on the platform of the locally-designed sedan model Samand.
IKCO produced 43,088 units of the model during the year ending last March, up 53% from the year before.
Dena made at Khazar car factory cost 14,000-16,000 manats ($8,200-$9,400) depending on options.
> Eurasian Economic Union
In February 2017, IKCO was granted the Eurasian Economic Union conformity certification for its cars, allowing the company to develop new export markets and revive its position in several markets.
EEU is a political and economic union of states in central and northern Eurasia, including Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
The Eurasian certificate indicates that the products conform to all technical regulations of the Eurasian Customs Union assessment procedures. It is allocated to six sedans produced by IKCO, including Soren ELX, Samand ELX, Soren Turbo, Runna, Dena, and Peugeot 206 SD.
With the certificates, IKCO cars can be sold in EEU markets with custom exemptions, which should make its cars more competitive against Chinese brands. The certificates can be used also for exports to Khazar car factory.
