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Iran to Join Global Auto Supply Chain

IKAP is to play the role of Peugeot’s auto parts manufacturing hub in the region. IKAP is to play the role of Peugeot’s auto parts manufacturing hub in the region.
A French delegation headed by Peugeot met with Iranian manufacturers of cars and auto parts

Peugeot, Iran Khodro and auto parts makers earlier this week attended a meeting in Tehran.

During the meeting, Hossein Najjari, the CEO of parts maker SAPCO, announced that Peugeot 2008 as the first product of IKCO-Peugeot joint venture will be released in February.

Peugeot 2008 is likely to cost upwards of 500 million rials ($14,000-22,000 at market exchange rate).

According to Najjari, the new deal will enable the company to produce a greater portion of the auto parts domestically.

“SAPCO is to provide 80% of parts needed by the IKCO-Peugeot joint venture, known as IKAP, while Peugeot will assist SAPCO by providing car molds and machinery,” he said.

The official noted that Peugeot has very strict international standards for auto parts, hence domestic standards will have to be raised.

Sixty foreign firms attended the event to team up with Iran’s car parts makers.

Najjari noted that several schemes have been undertaken to implement the deals with foreign companies.

A clause in the contract between the firms says that if Peugeot was to leave again, IKCO can continue to produce the parts without them.

At present, only 30% of the products of IKCO are to be produced in collaboration with Peugeot.

Najjari added that the SAPCO-Peugeot deal will produce parts for the three Peugeot models 301, 208 and 2008 parts, announcing that “70% of the parts will be made domestically by 2019”.

Over 200,000 units of these new models will be manufactured in Iran and 60,000 of them are to be exported, which will account for 30% of the joint venture output.

  IKAP Rises

Mohammad Reza Motamed, CEO of IKAP, also spoke in the meeting and announced that the JV has also signed a new deal with a local parts maker to get the ball rolling.

According to Motamed, IKAP is to play the role of Peugeot’s auto parts manufacturing hub in the region and its products are to be sold through the French company’s distribution network in the neighboring countries.

During the same event, Executive Vice President of Peugeot for Africa and Middle East Jean-Christophe Quémard announced that Peugeot 2008 will be available in Iran in Q1 2017 and the models 301 and 208 will enter the market in 2018.

According to Quémard, Iran is to become Peugeot’s export hub in the region, as IKAP eyes Persian Gulf countries as potential customers for the JV products.

The French official said Peugeot has a long-term plan for Iran’s auto industry.

Quémard assured reporters that the cars will be of the same quality as those presented in Europe.

Financialtribune.com