SAIPA-Proton Deal on Horizon

EghtesadOnline: The chief executive officer of Proton visited the headquarters of SAIPA, Iran’s second largest automaker, in Tehran and hinted that the two companies will sign a deal in the near future.

News ID: ۷۷۰۷۹۵

30 October 2016

During the visit, Ahmad Fuaad addressed a press conference about the upcoming deal, Persian Khodro reported.

“SAIPA has the required infrastructure and the key factors that Proton seeks in a partner and further negotiations for forging a joint venture are underway,” he said.

According to Fuaad, the negotiations will determine the production plans, sales and after-sales services and the costs.

He said Iran has left-hand traffic while it is the opposite in Malaysia.

By producing cars with steering wheels on the left side, Proton would be able to claim a bigger share in the Iranian market.

“Collaboration with Iranian companies would be lucrative in this light too. Proton needs Iran and a strong automotive ally such as SAIPA in the region to fulfill its economic plans,” he said.

Proton has a long history in Iran during the past decade with a prior deal with Zagros Khodro. The former alliance was named as a joint effort for producing “Islamic vehicles”.

Fuaad said any form of collaboration would be lucrative for the two Muslim countries.

The official also said production costs must be managed and the products should be affordable.

He also said the products of SAIPA have a promising prospect for presence in the Malaysian auto market, but they should be modified to suit the needs of Malaysia’s car buyers.

Fuaad said Malaysia’s auto market is highly competitive and “one of the important changes that must be implemented will be lowering prices”.

Proton’s former partner in Iran, Zagros Khodro, a private company ceased sales of the cars in 2012 following the imposition of western sanctions on the country, according to Financial Tribune.

The new deal with SAIPA may offer the Malaysian company a more secure and larger distribution network.

SAIPA’s offer could also help Proton ship to other markets that the Iranian company has designated as areas of possible growth, including the Levant and Maghreb countries.

The impending joint venture could also open markets in the Commonwealth of Independent States and Russia in the near future, which are also estimated to grow at least by 2% year-on-year in the next decade.