Economy, Auto

Iran Khodro (IKCO), SAIPA Owe $1b to parts manufacturers

Iranian companies should have at least a 40% share in the cars produced under the joint ventures.Iranian companies should have at least a 40% share in the cars produced under the joint ventures.

The two largest Iranian auto manufacturers, Iran Khodro and SAIPA, owe 40 trillion rials ($1.1 billion) to parts manufacturers, according to officials at a recent press conference.

During the event held by the Iranian Auto Parts Manufacturers Association, officials of the association addressed several issues, the most pressing of which is the car companies’ debts to parts manufacturers.

Mazyar Beigloo, chairman of the association, said 80 days past the repayment date, IKCO and SAIPA have not paid the parts manufacturers.

He also addressed the recent deals forged between SAIPA and IKCO with their French counterparts namely, PSA Group’s Peugeot and Citroen brands.

“Iranian manufacturers can adopt the needed technologies and keep pace with the foreign companies’ joint ventures with both IKCO and SAIPA,” he said.

He added that the production lines for the new parts can be established and modified in several months.

The association chief also claimed that if the required technology transfer takes place, Iranian parts makers can produce up to 60% of the new cars locally.

According to Beigloo, the association has held negotiations with the French companies active in Iran for new parts production.

“The CEO of Peugeot-Citroen, Carlos Tavares, and Managing Director for Renault Middle East and Director of the French company’s local subsidiary Renault Pars Peyman Kargar have been informed about the capabilities of Iranian part manufacturers,” he said.

He also emphasized that Iranian companies should have at least a 40% share in the cars produced under the joint ventures “and the officials with the Ministry of Industries, Mining and Trade have promised that in case the joint ventures do not stay through to this obligation, their production lines will be shut down”.

Kargar also addressed the issue of Renault’s recent deal with the Industrial Development and Renovation Organization and said considering the amount of investment to be made by the Paris-based company in the joint venture, “one can easily deduce that Renault is pursuing a long-term presence in Iran”.

He added that Kargar has evaluated Iranian parts manufacturers and announced that 65% of the companies are capable of becoming production partners of Renault.

Farhad Behnia, the association’s spokesman, said unlike in previous years, Iranian parts manufacturers will not do reverse engineering to produce copies of the original products of French carmakers.

Behnia noted that both Renault and Peugeot-Citroen are willing to collaborate directly with Iranian parts makers by providing them charts and designs.

Add new comment

Read our comment policy before posting your viewpoints