Iran Car Output Soars

Iran Car Output SoarsIran Car Output Soars

Iran Khodro Automotive Group, also known as IKCO, has released its latest data on the first quarter of the current Iranian year (started March 20), which show that it produced more than 20,000 cars.

IKCO has been given a new lease of life in recent months with the abolition of sanctions on the Iranian economy and the group’s partners slowly coming back to start joint ventures, most notably PSA Group’s Peugeot brand will invest over €300 million in the new joint company IKAP.  

The report notes that in the first quarter of the Iranian year, 185,762 vehicles were produced and the highest number in terms of brand being Peugeot’s 206, 405 and Pars models.

The French carmaker signed on June 21, 2016, the final joint-venture agreement with Iran Khodro. This has two implications: firstly, the restoration of contractual relations for the production of Peugeot-branded vehicles currently sold in Iran.

Secondly and most significantly, the two companies will launch a joint factory in 2017 to produce the 301, 208 and 2008 models for sales in Iran and regional markets.

In the ranking, Samand follows at a distance at second place with 30,253 units.

The Samand has been produced by the manufacturer for over a decade with buyers now being people looking for replacement models of the vehicle.

The Samand was at one point the newest model made by IKCO, but that has now been superseded by the Samand Soren (an upgraded model) and Dena, which is based off the same Peugeot 405 platform but with a different body work and cabin.

France’s other large car manufacturer Renault follows in third place, thanks to the continued success of the Tondar L90 (a first generation Dacia Logan).

The Tondar model is produced by two other companies in Iran, namely IKCO’s competitor SAIPA and its subsidiary Pars Khodro, which sells another modified version of the car.

Renault also recently announced that they would introduce a face-lifted version of the vehicle for the local market, while other new Dacia-derived vehicles will also enter the market over the next 12 months, including the locally produced Sandero and the currently imported Renault Duster.

IKCO’s Dena is next on the list with growing purchases of the car which has been earmarked to replace the Samand in the long run.

IKCO has overproduced this model, according to the sales figures, though just under 100 vehicles remain unsold. One way of understanding the close parity is that IKCO is producing to demand with this new vehicle.

The car producer has also announced that an upgraded version of Dena will also be released in the next few months with slightly modified bodywork to the rear doors and an upgraded grill.

The 206-derived Runna sedan is the next most popular car in the period with 6,940 units sold. Interestingly, IKCO has also overproduced this model, with demand for the vehicle slightly ebbing in recent months due to a glut of Chinese vehicles entering the Iranian market in the same price range but offering better styling.

Suzuki vehicles have seen a significant drop in production numbers in recent months with only 13 vehicles produced in this period. A total of 138 vehicles was sold, suggesting the carmaker is still taking order for the third-generation Suzuki Grand Vitara, which was highly popular several years ago in Iran.  

Overall, IKCO’s light vehicle production rate shows a good tempo with 185,762 locally-produced units, including other vehicles it produces through Iran Khodro Diesel such as trucks and vans.

Pickup van sales at 8,562 outstripped production with the hugely popular Arisun pickup mopping up the market with its large bay size for commercial buyers.

As previously reported, van sales in Iran are a hugely neglected market with only a limited range of sizes available, which do not meet the needs of commercial buyers.

However, that may not last long, as foreign companies like Hyundai have begun to explore the commercial vehicle market in Iran, with Renault also interested in broadening its range.

In conclusion, Iran Khodro’s first quarter production shows a trend where newer models are slowly growing in traction.

Taken as part of a wider picture, Chinese cars and other locally produced foreign brands are starting to eat at the older vehicles produced by the biggest Iranian car company.