No Obstacles to IKAP

Since the establishment of the IKAP joint venture in June, there have been no restrictions on money transfer
Auto part manufacturers that join in the production of new cars should observe Peugeot’s regulations.  Auto part manufacturers that join in the production of new cars should observe Peugeot’s regulations.

Iran Khodro Company, the largest domestic carmaker, will follow international patterns put forth by Peugeot for the sales and exports of new models that will be jointly produced with the French company, said the director of IKCO-Peugeot joint venture known as IKAP.

Mohammad Reza Motamed also said there are no major concerns in regards with financial transactions, as the payment from the export of cars is assured, ILNA reported.

“Since the joint venture was established, there have been no restrictions on money transfer,” Motamed said.

“Taking into account the logistics and transportation costs, Iran’s immediate neighboring countries and those in the Persian Gulf region will be the main targeted markets for IKAP exports.”   

Peugeot-Citroen announced its return to Iran on June 21, signing a €400-million joint venture with IKCO in Tehran.

Previously, it had been announced that the first cars produced under the new venture are set to hit Iranian roads in February 2017, with an annual target of producing 200,000 vehicles by 2018.

The 50-50 joint venture will manufacture three models—Peugeot 208, 2008 sport utility vehicle and 301 compact—using parts mostly made in Iran.

“We are quite hopeful of Peugeot 2008 SUV to be available in Iran by the end of the current Iranian year (March 2017),” Motamed said, adding that 20% of the car will be manufactured locally.

He noted that this percentage will increase and eventually reach 40%, “a goal that can only be achieved in collaboration with local auto part manufacturers”.

According to the IKAP chief, the production of cars with higher quality will prepare the grounds for local auto part manufacturers to also learn more about the latest global standards and technologies in their field of work.

“Following the contracts signed by IKCO and Peugeot, several local auto part manufacturers also recently signed new deals with their foreign counterparts,” he said.  

The CEO added that Peugeot has very strict international standards for auto parts, therefore any auto part maker that wishes to join in the production of cars should observe these regulations and establish links with Peugeot’s global auto part chain.

“The operations of local auto part makers’ collaboration with IKAP will be closely monitored,” he said.  

“If local part makers succeed in doing so, not only will they be able to provide the parts we will need for manufacturing, they could also start exports.”   

Motamed noted that 80% of every agreement can be released to the public and IKCO is also observing these terms and conditions, and has made the necessary public announcements, but the remaining 20% cannot be publicly disclosed, according to law.        

Commenting on the deal SAIPA signed with Citroen, Motamed said any joint venture to manufacture cars with major global brands is welcome.

“Iran’s auto industry will surely benefit from more strong rivals entering the market. More strong players would increase the motivation of car manufacturers for producing cars with better quality,” he said.