SAIPA, Iran’s second-largest auto manufacturer, is revealing plans for expanding ties with two of its Chinese partners, Brilliance and Changan, to further grease the wheels for the company’s ascent to the top as the country’s biggest carmaker.
In an ongoing trip to China, Managing Director of SAIPA Mohsen Jahroudi visited Brilliance and Changan’s factories and discussed fostering new collaborations with both manufacturers, the Iranian firm’s public office reported.
SAIPA is on a fast track to replace Iran Khodro as the country’s largest auto manufacturer. According to projections based on the two companies’ current gross rates, SAIPA will trump IKCO in less than a year.
As stated in the latest report released by the Ministry of Industries with a total output of 712,268 units, during the last fiscal which ended in March, IKCO’s year-on-year production rate growth stands at 8.9%. This is while SAIPA manufactured 666,488 units recording a 16.8% YoY growth.
The gap between the production units is evidently narrowing and both companies’ strategies for this year show they are preparing for a showdown.
While IKCO is increasing joint-venture production numbers with its French partner Peugeot and upgrading old models, Jahroudi seeks to diversify the company’s products by jointly producing six new vehicles with Changan and Brilliance.
The automotive industry in China has been the largest in the world measured by automobile unit production since 2008.
The country’s total output in 2017 amounted to 29 million, indicating a 3.19% growth rate, according to The Organisation Internationale des Constructeurs d’Automobiles.
Changan
Chongqing Changan Automobile Co., a major state-owned automaker in the southwest China city of Chongqing, signed a joint venture deal with SAIPA in 2014 to produce vehicles in Iran from complete knockdown kits imported from China.
The Chinese enterprise was to produce Eado compact sedan and the CS35 compact SUV in Iran. Currently only the latter is manufactured.
The CS35’s total output in the 12 months ending in March was 11,889, revealing a 153.7% YoY increase.
Jahroudi was invited by Changan executives to visit the corporation’s research and development center and automotive testing facility.
The managing director broke the news that two more Changan products will be soon produced in Iran, though he did not specify the models.
It is rumored that one of the new models might be Changan Benni, a small hatchback with a four-cylinder, 1.4-liter engine paired with either a 5-speed manual or semi-automatic transmission.
Changan has joint venture agreements with Ford, PSA Group, Mazda and Suzuki.
Brilliance
In 2015, Brilliance signed a deal with SAIPA to produce its H300 and H200 series in Iran.
SAIPA and Brilliance currently produce four models in the country, namely H220, H230, H320 and H330.
The collective output of the four models added up to 50,729 during the past Iranian fiscal indicating a 63% YoY rise.
The success of the models might be the reason why four new Brilliance models will be introduced to Iran’s auto market in the near future.
Brilliance Auto Group is a Chinese automobile manufacturer headquartered in Shenyang.
The Chinese company holds 50% share of BMW Brilliance, a joint venture with BMW which produces, distributes and sells BMW passenger cars in mainland China.
Other Ventures
In addition to Brilliance and Changan, SAIPA has joint venture deals with Kia Motors and Citroen.
As per the deal with Kia, SAIPA is manufacturing the popular sedan Cerato. Furthermore, SAIPA and Citroen signed a 50-50 joint venture deal in late 2016 according to which the Paris-based carmaker is obliged to invest more than €300 million ($352 million) in Iran during the next five years. Two models namely C3 and C4 are to be produced in Iran under the JV.
One of the company’s main objectives must be finding a replacement for its infamous creation, Pride.
Localization of products jointly manufactured with Chinese companies might lead to a product that is as cheap as Pride, but with basic safety standards.
