Economy, Auto

SAIPA in Talks With PSA for Joint Venture

SAIPA in Talks With PSA for Joint Venture
SAIPA in Talks With PSA for Joint Venture

SAIPA says discussions are underway to start a joint venture production with PSA Groupe.

Following courtship by western automotive supplier bodies such as FKG in Sweden and FIEV in France, component makers and automakers are now starting to make their presence felt with a raft of announcements this week such as Bosch establishing a Tehran office.

PSA and Renault have long held ties with Iran and the former has been particularly active of late, announcing a major $436 million deal with IKCO, which mandated 40% (some say 50%) of components must be sourced domestically in the 50:50 joint venture.

Now PSA has turned its attention to IKCO's domestic rival, SAIPA, with both sides discussing the establishment of a JV to produce Citroen models.

"Negotiations are underway and it will be a joint venture between SAIPA and Citroen. As soon as the contract is signed, more details will come out," a SAIPA spokesman told Just-Auto from Tehran.

"Specifically, they [SAIPA] are going to produce C4 with PSA. We [with Iran Khodro] are two rivals, two competitors. I don't think there is a conflict. The contract between IKCO and PSA does not have any concern with [plans to produce] Citroen with SAIPA."

A condition of PSA's agreement with IKCO was a 40% mandatory local content.

"[Local content] is the trend; Peugeot and Citroen [are] looking for local partners to facilitate production here," added the SAIPA spokesman.

"The French side need[s] some local parts manufactured in Iran. It is a win-win situation for both automakers because there are some facilities available in Iran that Citroen wants to use."

Renault also has a joint venture with SAIPA. For more than 10 years, Renault Pars, a joint venture with Iran's two main auto manufacturers, SAIPA and Iran Khodro, has enabled it to produce nearly 500,000 vehicles in the country.

In 2015, two new vehicles were manufactured: the Logan Pickup with Iran Khodro and Sandero with SAIPA.

"In Renault, they have several parts makers here and are using local parts makers," the SAIPA spokesman added.

FIEV has its own dedicated "Club Iran" section, with president, Didier Hedin, telling Just-Auto from Paris earlier this year the country was targeting a 2-million-vehicle target in 2020, increasing to 3 million five years later, with the clear benefits that would bring to suppliers.

"For sure, French parts makers, they are already linked with Peugeot and Renault and will be involved very deeply in Iranian production, so it is an advantage," said Hedin.

"We believe not only Renault, Peugeot, but other European carmakers, more than probably from Germany and Italy [will also join]."

PSA-IKCO's joint venture will see a Tehran facility established to produce vehicles and whose platform the Iranian company will share to develop its own models, as well as the 208, 2008 and 301 Peugeot cars.