Iran Khodro Company (IKCO), the country's major automaker, has launched a new auto part production line that will purportedly save €17 million in imports each year.
Farshad Moqimi, the CEO of IKCO, inaugurated the production line in the premises of a subsidiary, Iran Khodro Machine Tools Industries Company (IKMT), in west Alborz Province on Thursday, Ikcopress.ir reported.
“The production line is specialized in manufacturing torsion beam suspension for IKCO's Tara model,” he said, adding that this is in line with indigenization efforts launched by the Ministry of Industries, Mines and Trade a few years ago.
"The key component was designed and manufactured with the assistance of seven industrial groups and the support of IKMT," he said.
Moqimi asserted that the quality of IKCO's torsion beam compares favorably with foreign versions, which is also being considered for export.
Ali Haddadi, a parliamentarian who was also present at the event, stated that the inauguration of the production line will help reduce unemployment in the region.
He acknowledged IKCO's efforts in automotive localization and promised to help remove impediments and excessive bureaucracies in the way.
Tara’s Technical Features
Also known as K132, Tara is a modified version of Peugeot 301, based on IKCO’s IKP1 platform that is also shared with Peugeot 2018, 2008 and Citroen C-Elysee.
After the Joint Comprehensive Plan of Action was announced in 2015, Iran Khodro and Peugeot Citroen intended to jointly produce Peugeot 301, Peugeot 208 and Peugeot 2008 as the IKAP (Iran Khodro Automobile Peugeot) joint venture.
After the reimposition of sanctions by the United States in 2018, Peugeot left Iran and IKAP was suspended. As a result, Iran Khodro facelifted the Peugeot 301 and the result was Tara, which was unveiled for the first time in February 2020.
K132 was officially unveiled by IKCO and pre-sold for the first time in July 2020.
The car is produced with two gearbox options (manual and automatic), and TU5P engine, with a 1600cc, 4-cylinder, 16-valve indirect injection engine that produces 110 horsepower and 144 Nm.
Tara’s maximum speed is 190 km/h and the car's acceleration from 0 to 100 km/h in the manual model is 9.5 seconds, according to the manufacturer.
IKCO’s Localization Initiatives
In late June, IKCO announced that it has slashed capital flight worth €13 million through the indigenization of auto parts production since the beginning of the current Iranian year (March 2021).
According to Moqimi, the achievement was made possible by technological breakthroughs in the auto industry.
“IKCO has implemented over 150 auto parts localization and vehicle design projects in the past two years with the help of Iranian auto parts manufacturer SAPCO,” he added.
Moqimi said this has resulted in the installation and utilization of a local car platform, a large number of parts, six-speed manual transmission (gearbox) and three-cylinder piston engines.
“These projects have gradually curbed IKCO’s dependency on foreign suppliers,” he added, hoping that these will minimize the use of imported complete knock-down kits.
According to IKCO’s chief, the company has so far localized 2,000 sets of vehicle frames and mechanical tools with the support of industrial units affiliated with the Defense Ministry and knowledge-based companies.
“The company used to annually spend close to $360 million for the import of parts. Fortunately, indigenization efforts can raise the amount of saving to $248 million per year,” he said.
Ties With Banks
To boost IKCO’s localization initiatives, Iran’s Bank Tejarat has decided to lend 1.5 trillion rials ($5.4 million) to the automaker.
Based on a recent agreement between the two entities, the bank agreed to pay financial facility by the end of the current fiscal year (March 2022).
Moqimi said Bank Tejarat is the company's financial strategic partner, stressing that financial assistance can help localize auto parts manufacture and increase the sector's net working capital.
“The bank has also agreed to issue a specific amount of productive credit certificates to the carmaker to help oil the industry's wheels,” he added, hoping that the pact will encourage automakers and parts manufacturers to expand their operations.
Also known by its Persian acronym Gam, Productive Credit Certificates are a financial instrument newly developed by the Central Bank of Iran to help meet the funding needs of manufacturing units and businesses.
The instrument is described by the bank as a “market-oriented instrument that can be traded in money and capital markets”.
