Azim Khodro brokerage group, renowned in Iran for its national auto sales network, has purchased a 70% share of Zagros Khodro, as part of a deal to revive the southern-based auto producer's manufacturing base.
Zagros Khodro, which previously produced complete knocked-down kits of Proton models, continues to service the Malaysian-derived vehicles.
As part of the new joint venture, 50,000 cars per year will be produced in Zagros' manufacturing hub in Lorestan Province, the company announced in a press release.
An unnamed official at the company said, "The strategic alliance now provides the perfect platform for an additional 50,000 vehicles to enter the market. We're very excited about this development."
The company official declined to say which vehicles would be produced as part of the new venture, but hinted that Proton is not part of the new deal.
However, sources close to the new deal have said Chinese-derived cars are high on the agenda, as their pricing matches Iranian car buyers' pockets.
Zagros, which previously produced the Proton Gen-2 and Impian models before sanctions hit Iran in 2011, has suffered from the general slowdown in automotive demand in recent years.
At the company's main facility in Lorestan's regional capital Boroujerd, the joint venture will create 2,000 direct jobs for the city.
Iran's private auto sector in recent years has been hit with sagging demand and rising costs due to the devaluation of Iranian currency, hence the latest deal is a sign of the situation improving for this company.
