Iran's second largest carmaker, SAIPA (Société Anonyme Iranienne de Production Automobile), has begun shipping locally made cars to the Mediterranean country of Lebanon.
The company's export deputy, Ahmad Esmaeili, noted that the initial agreement had been reached in January after conducting extensive negotiations with potential Lebanese business partners. SAIPA will sell vehicles across Lebanon and will offer after-sales services, local automotive website Persian Khodro quoted him as saying.
The official noted that the first shipment of 152 vehicles includes a wide class of vehicles namely passenger cars and pickup's as well as heavy and semi-heavy duty vehicles.
The company official announced it has exported a range of Prides (X100), Tibas, Arios, Zamyad pickup trucks and the Chinese Brilliance H200 and H300 manufactured by SAIPA and Pars Khodro in Iran.
He further said that the Prides and Tibas will be priced $7,500 - $8,500 while the Brilliance H300 and H200 as well as the pickup trucks will be sold for $10,000 to $13,000. The shipment's total worth is nearly $1.2 million.
In the first year, SAIPA will be shipping 500 vehicles to Lebanon to test the appetite for the vehicles, he said.
"Lebanon's market is not very large and 50,000 units are sold in the country annually."
According to Esmaeili, SAIPA had carried out comprehensive investigation on Lebanon's market and economy before signing the deal.
"Lebanon's market is very attractive especially because the country is one of the most prominent tourism hubs in the region," he said.
He pointed to economic price range, fuel efficiency, affordable spare parts and after-sales services as the competitive advantages of SAIPA's products while projecting that SAIPA is set to gain a considerable share of the lower end of the market in Lebanon.
He added that SAIPA's presence in Lebanon has several challenges. "Prominent American, European and Asian brands all operate in the Lebanese market and the second-hand car market is also very popular."
The competitive advantages of SAIPA, however, can help the company gain a strong foothold in the region, he noted.
"SAIPA will be setting up three after sales service centers, one in Beirut and two in Tripoli. A shipment of auto parts will be sent soon."
To Africa and Beyond
In addition to expanding its market share in the Eastern Med, the company official has said it has begun procedures to enter the burgeoning African market.
Esmaeili said SAIPA also plans to begin operations in Sub –Saharan Nigeria.
"We are currently conducting the initial negotiations with business groups in that country," he said, adding "It has been estimated that SAIPA can produce 15,000 vehicles over a five-year period in Nigeria."
Earlier in January, the company announced that in the second half of 2016, it would begin production of five models in Algeria, said Mehdi Jamali, the company’s CEO at the time.
For that market Tiba, Saina and Pride were the likely contenders, Donyaye Khodro quoted Jamali as saying.
It was reported that SAIPA predicted it would annually produce 20,000 vehicles there. The name of the Algerian company was not mentioned in the original report.
“If an auto part manufacturing site is set up in Algeria and the supply chain is optimized, SAIPA will be able to produce more than 20,000 vehicles on an annual basis,” he projected.
