French Stakeholders See Positive Side of Iran’s Auto Outlook

EghtesadOnline: Managing directors from French automotive companies PSA Group and Renault say Iran is seen as an appealing market by global carmakers. Renewing their companies’ commitment to major agreements with Iran carmakers, the two men emphasized that they are here to stay.

News ID: ۷۴۴۹۸۵

15 February 2018

Speaking at the 5th Iran Automotive Industry International Conference (IAIIC) on Tuesday, PSA executive vice president for Africa and Middle East Jean Christophe Quemard said, “Iran is a major market for PSA Group. We are set to prove ourselves as a trustworthy industrial partner for our Iranian counterparts,” IDRO News reported.

The automotive giant sold 444,600 cars in Iran in 2017 under Peugeot license owned by Iran Khodro. Iran has 83.4% share of PSA’s total sales of Peugeots in the Mena region. Close to 2.11 million Peugeot cars were sold globally in 2017. Here again Iran had a 21% share of the brand’s global sales.

IKCO and Peugeot signed a €400-million deal in June 2016. Through the 50-50 joint venture known as Iran Khodro Automobiles Peugeot (IKAP), three models, namely Peugeot 208, 2008 and 301, will be produced in Iran. Production of the 2008 SUV has started, according to Financial Tribune.

The French automotive company’s Citroen brand signed a joint production deal with SAIPA in July 2016 that obliges the Paris-based carmaker to invest €300 million in Iran over five years for the development and production of three models.

Quemard says, “PSA is set to introduce a new SUV in Iran this year.” He did not elaborate.

He recalled that collaboration between SAIPA and Citroen started in 2017 and the first Citroen rolled out of SAIPA’s Kashan factory in December of that year. Quemard added that PSA has started investment in the Kashan production facility.

SAIPA started a test assembly of the Citroen C3. According to SAIPA News, mass production of the C3, initially from semi-knocked-down kits, will start in May.

>Renault

Renault’s country director for Iran Pascal Felten was also present at the event.  “We are proud that Renault has been present in Iran unceasingly for the past 14 years. The continued presence has secured a strong foothold in the country for Renault,” he told the conferees.

The French carmaker signed a €660-million trilateral production deal with IDRO and the local private company Negin Khodro last August. Sounding positive,   Felten said, “Implementation of the deal would contribute to job creation in Iran.”

He went on to renewed Renault’s pledge to assist Iranian auto parts makers to join the global supply chain of the Renault-Nissan-Mitsubishi alliance. “Renault is poised to turn Iran into its regional export hub.”

Three Renault models, namely Kwid, Duster, and Symbol are to be produced in Iran under the deal. It is said that the first Kwids should be in the market later this year.

In addition to the French carmakers, Silvio Angori CEO of Italian car design firm Pininfarina and Isabelle Bailly, chairman of SNECI, a French business consulting company, were also present at the event.

Pininfarina signed a €70 million agreement with IKCO for the development of a technological automotive platform in May 2017.

CEOs of Iran’s largest auto companies, Hashem Yekezare from IKCO and Mohsen Jahrodi of SAIPA were present at the key meeting.

>Industry in Numbers

The Minister of Industries Mohammad Shariatmadari opened the two day conference and in a speech underlined the capacity and potential of the domestic automotive sector. “The auto industry has a 3.5-4% share in Iran’s GDP and 12% of the Iranian workforce is employed by the sector. Annual turnover of the auto industry is $12 billion.”

After the Iran nuclear deal was signed [in 2016] “the country attracted $9.7 billion in direct investment. About $2 billion of this amount was in the auto industry.”

During the current fiscal that ends in March, 1.65 million cars are to be produced in the country. During the nine months to December more than 1 million vehicles were produced, he said.

Shariatmadari noted that attracting foreign investment, establishing R&D centers, and increasing the share of Iran made parts in cars produced domestically are among the main priorities in developing the local auto industry and moving it towards sustainable growth.

The minister, however, was cognizant of the fact that “people are not satisfied with the quality of vehicles produced in Iran,” and reiterated the need to compel local  companies to manufacture quality cars.

Echoing the minister’s comments, head of Industrial Development and Renovation Organization of Iran, Mansour Moazemi said, “Local carmakers’ products fall short of people’s expectations and there is much room for improvement.”

There are 800 auto parts makers in Iran. “After the revolution in 1979 an estimated 21 million vehicles were produced in the country. Iran aims to increase its annual  vehicle output to three million units,” the IDRO chief said.

The event ended Wednesday at the iconic Milad Tower in north Tehran.