Car Production Plan Back on Iran-Oman Agenda

The long-awaited deal for overseas IKCO production is being rediscussed by Omani and Iranian officials
IKCO’s Dena is pegged as the first car to be produced in the neighboring Sultanate of Oman.IKCO’s Dena is pegged as the first car to be produced in the neighboring Sultanate of Oman.
The joint venture is due to start assembling 10,000 cars in Duqm in the first phase

The governments of Iran and Oman will continue  negotiations on setting up a plant in the Persian Gulf sultanate over the next few days according to reports from the two capitals. 

Talks between Iran Khodro Group (IKCO) and Oman Investment Fund (OIF) will focus on the production of cars in the neighboring Arab state. 

According to Iran’s charge d’affaires in the Omani capital, Mohammad Totonchi, Iran wants to establish a car production facility in the Duqm Special Economic Zone in the next few months, ISNA reported on Monday. 

“Tehran will establish a [car] factory in the Duqm zone” he said without giving further details on the deal.

Iran is currently holding an exclusive technology exhibition in Muscat. 

The exhibition is being held with the participation of 90 companies. IKCO is showing its Dena, Soren, Samand and Runna models.

Iran’s Industries Minister Mohammad Reza Nematzadeh is said to be heading to the exhibition as a special guest of the Omani government, the Oman Tribune reported at the weekend. 

 A Car Hub

Khalid Al Yahmadi, the OIF investment director, said earlier that a preliminary study had been conducted before signing a MoU.

As per the agreement, Iran would jointly produce the Dena and export it to East Africa and Yemen within a year.

It was said in September last year that the first Dena models to roll out from the Omani plant would be in late spring 2017, according to reports from Muscat.

However countless delays in negotiations since then have put the project on the back burner. 

 Intended Model Production

IKCO’s Dena would be the first car to be assembled at the factory – and also the first in Oman.

Al Yahmadi noted then that the vehicles may be sold under a separate brand. The Omani fund director added that initial annual production would be in the range of 20,000 units. 

Meanwhile, Saeed Tafazzoli, IKCO deputy for export and international affairs, said the joint venture will start assembling 10,000 cars in Duqm in the first phase.

Tafazzoli said in April last year “A feasibility study is underway, which will be completed next month. Based on the [positive] findings of the study, a joint venture will be established.”

He said IKCO would need 12 months for setting up an assembly unit and creating other production facilities,” the Times of Oman had reported at the time.

Although the project may seem small compared to Iran’s overall production numbers at home, it is seen as a major trade agreement between the two neighbors that have enjoyed cordial political relations both before and after the revolution in Iran in 1979. 

Meanwhile, Chairman of the Iran-Oman Joint Chamber of Commerce, Mohsen Zarrabi, has forecast an increase in Iranian exports to the Sultanate of Oman to the tune of $600 million by the end of the fiscal year in March.

Add new comment

Read our comment policy before posting your viewpoints