Economy, Auto

Iran to Produce MGs in 2017

The IKCO-SAIC car will unveil the new MG 360 this week.
The IKCO-SAIC car will unveil the new MG 360 this week.

The first product of a Sino-Iranian joint venture is to be unveiled this week.

“MG 360 is the newest car to be produced in Iran,” CEO of Iran Khodro Azarbaijan Nasser Naqdi announced on Sept. 28.

The 50-50 joint venture was created two years ago between China’s SAIC Motors and AZVICO—one of the subsidiaries of Iran Khodro Group, but has only materialized now.

The announcement revealed they initially invested $20 million each in a company called “MG Pars Motor” and will increase the amount to $400 million.

Naqdi said the first units of the car will assembled from completely knocked-down parts.

According to the official, the company will produce 10,000 cars in 2017 and aims to increase it to 200,000 units in 2018.

Naqdi also said the JV will introduce at least one new model annually to Iran’s market.

“SAIC RX5 and another SUV will be made in 2017 and 2018 in Iran respectively,” he said.

MG Pars Motor is also planning to introduce hybrid vehicles produced by the Chinese company.

Naqdi referred to technology transfer as one of the main goals of the joint venture and said the factory’s paint shops and body production line will be established in the coming years.

During the same event, the Chinese CEO of MG Pars Motor Lin Yong, who will also be in charge of distribution, named Iran as one of the industrial hubs of the region.

“In addition to local sales, the cars will be exported to Ukraine, Syria, Lebanon and Jordan,” he said.

Lin noted that SAIC is currently negotiating with local parts producers for further collaboration.

The price of the model has been estimated to be about 550 million to 650 million rials (about $15,000), but Naqdi told reporters that both the price and production rate of the model are to be determined by the market.

The news of SAIC’s expansion in Iran follows the closure of the company’s British operations following lackluster interest by UK car buyers in recent years.

The company said the move will result in a more efficient production cycle, as the complete manufacturing processes will be handled in China. It also said its plans have nothing to do with the “Brexit” vote in the country earlier this summer.

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