SAIPA Going Strong

EghtesadOnline: SAIPA, the second biggest Iranian carmaker, is showcasing new and current models in two auto expos underway in Iran’s central and western cities of Arak and Urmia respectively.

News ID: ۷۳۶۸۳۵

11 September 2016

According to the local automotive website, Persian Khodro, the company produced 50,000 units in the last Iranian month (ended Aug. 21), which marks a 53% rise year-on-year.

SAIPA is the producer of the relatively cheap Pride models that are of the most inferior quality.

Hassan Qarei, SAIPA’s director for research and strategic planning, said the company intends to produce at least 530,000 vehicles this year.

The official also detailed the company’s production rate in recent. He reported that in the first five months of the current Iranian year (started March 20), SAIPA manufactured 198,592 units which, compared to last year’s 158,506, indicates a 25% rise y/y.

Qarei noted that in addition to providing engineering services to international companies, SAIPA earned $85 million from car and auto part exports in the last Iranian year.

He added that the company gained a 60% share in national auto exports.

The official announced that by March 2017, his company will unveil four new models, including the subcompact New Sandero, Changan’s SUV CS35 and the Padra pickup.

Talks and Collaborations

On September 9, the SAIPA chief said at the event held for unveiling the Changan CF35 that the company will produce 5,000 units in the year ending March 20, 2017, and raise this figure to 15,000 next year.

Jamali outlined SAIPA’S recent negotiations with foreign companies and said negotiations with Citroen have been finalized while those with other foreign automakers, including Changan, Renault, Nissan and Kia Motors, are underway, Asre Khodro reported.

“Currently, only 4% of SAIPA’s products are made in collaboration with Chinese automakers, while Chinese auto manufacturers have been able to gain a firm foothold in Iran’s auto market in recent years,” he said.

According to Jamali, only some models of the two Chinese automakers Changan and Brilliance were able to meet the standards of SAIPA, but there is no limit to collaboration with other Chinese firms.

The official also announced that SAIPA is aiming to increase its annual production rate to 1.5 million units before 2024.

The company has pledged that 50% of its products in 2024 will be manufactured indigenously and the rest in collaboration with international companies and foreign investment.

Jamali said his company plans to become a major automotive hub of the region and meet all the needs of the national and regional market.

According to the official, there is a growing demand for inexpensive vehicles in neighboring countries and SAIPA is planning to cater to this demand.

“Regardless of the country of origin, SAIPA is willing to negotiate with interested companies to secure both the national and SAIPA’s interest,” he said.

The company recently forged a deal with Paris-based carmaker, PSA Peugeot Citroen, which obliges the French carmaker to invest €300 million ($330 million) over the next five years for the production of three Citroen models, which will be sold in the country via a network exclusively established for the brand.

On August 22, Iran’s Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh said the outlines of the deal have been determined and the final deal will be signed in a month, reports Financial Tribune.

Rise in Sales

On September 5, SAIPA’s CEO Mehdi Jamali said the company’s financial structure has been reformed, which caused a significant jump in the company’s production rate, reported SAIPA News.

On September 7, Reza Taqavi, the sales director of SAIPA, announced in a press conference held at Arak Expo that the company’s sales registered a 170% leap in the current Iranian year.

“The rise in sales has enabled SAIPA to improve its solvency ratio and pay a great share of its debts to auto parts manufacturers,” he said.

The official referred to expansion of the company’s range of products, quality improvement and cost management reform as the main reasons for the recent jump in sales.

Taqavi noted that SAIPA aims to design and produce low emission and electric cars in future.

Zamyad Khodro

The production rate of Zamyad Khodro, one of the major subsidiaries of the company, has jumped significantly during the first five months of the current Iranian year.

The company produced a total of 11,027 trucks, vans and pickup trucks and sold 8,708 units during this period.

In the last Iranian month (ended Aug. 21), it produced 2,393 units which, compared to the company’s production rate of the previous month, showed a 69% rise.