Economy, Auto

Oman to Assemble 10,000 Iranian Cars in 1st Phase

Oman to Assemble 10,000 Iranian Cars in 1st PhaseOman to Assemble 10,000 Iranian Cars in 1st Phase

An Iran-Oman joint venture to manufacture cars in the sultanate will become operational after one year, according to a senior official of Iran Khodro Industrial Group.

Saeed Tafazzoli, IKCO's deputy for export and international affairs, said the joint venture will start assembling 10,000 cars in Duqm in the first phase, which will be scaled up to 20,000 units in the second phase.

“A feasibility study is underway, which will be completed next month. Based on the [positive] findings of the feasibility study, a joint venture company will be established and the project will start construction. We will need 12 months for building an assembly unit and creating other facilities for starting production,” Tafazzoli told Times of Oman.

A memorandum of understanding was signed by the Tehran-based automobile giant, which is the largest automobile manufacturer in the Middle East, with Oman Investment Fund in January.

The joint venture also plans to launch Khodro’s Dena brand in Oman.

Apart from selling cars in Oman, the joint venture involves exporting cars to neighboring regional markets and Africa.

Tafazzoli said the initial investment for the assembly line would be $15 million, which will have a capacity of assembling 10,000 units.

“The capacity will rise to 20,000 units per year within two years. The company will also set up a body shop and a paint shop in the second phase and the investment in the second phase will be $30 million,” he added.

The Iranian auto firm will support the joint venture with technical know-how and training, apart from supplying equipment for the assembly unit.

Tafazzoli noted that there is a great opportunity for Oman's private sector to set up units for producing automobile spare parts.

“Many parts are not economical to import from Iran. Such spare parts can be manufactured in Oman,” he said. T

his is possible by establishing vendor-to-vendor tie-ups with Iranian auto parts suppliers.

Tafazzoli said the joint venture will provide employment opportunity for 130-250 people in the production plant and for 50 supporting staff.

Also, there are two other areas for generating employment in after-sales services and spare parts distribution.