Brazil Auto Parts Makers in JV Talks with Iran

EghtesadOnline: Officials from Apex-Brasil (Brazilian business export agency) and Sindipecas (Brazilian auto parts makers’ guild) are on a trade mission in Tehran to explore business prospects.

News ID: ۷۷۶۲۵۷

16 May 2017

At a conference at the Industrial Development and Renovation Organization of Iran (IDRO) headquarters on May 13, officials from the countries outlined a tentative deal to jointly produce auto spare parts, IRNA reported.

Besides Apex-Brasil and Sindipecas officials, representatives from 12 Brazilian automotive companies are part of the delegation.

Director of IDRO, Mansour Moazemi, said, “Given Iran’s easy access to the regional market, goods produced jointly by our and Brazilian part makers can be exported to the neighboring countries,” according to Financial Tribune.

In addition to the production of auto parts, “Iranian companies active in the automotive sector can collaborate with the Brazilian companies in manufacturing cars, buses and other commercial vehicles,” he said.

On the turnover of the country’s automotive industry Moazemi said, “Iran’s automotive industry was valued at $25 billion last fiscal year (ended March 20). Of this amount, $16 billion was generated through local production and sales of cars and commercial vehicles.”

According to a statement on the official website of Apex-Brasil, released to coincide with the mission from the South American country, Iran’s auto parts sales were valued at $8 billion last year. The figure is based on data  provided by the Iran Auto Parts Makers Association (IAPMA).

Moazemi said, “With the present infrastructure, Iran’s auto industry can annually produce 2 million vehicles.”

Figures released by the Ministry of Industries, Mining and Trade indicate that during the last fiscal carmakers produced 1.3 million vehicles.

The auto sector is aiming to produce 1.6 million vehicles this year, the IDRO official said. This is while the latest report by Iran Vehicle Manufacturers Association (IVMA) shows that production in the first month of the current fiscalwas 68,074 units.

Biggest in Mena Region

At the same meeting, Chief Operating Officer of Apex-Brasil Karen Fernandes Jones said, “Brazil’s automotive industry has been collaborating with Turkish companies in recent years, which has proved lucrative for both countries.”

Brazil wants “a similar production deal with Iran,” she added.

Iran is the largest automaker in the Middle East and North Africa. Jones said this makes Iran an ideal industrial partner for Brazil in the region.

According to 2016 production statistics published by Organization Internationale des Constructeurs d’Automobiles (International Organization of Motor Vehicle Manufacturers), Iran is the 14th largest auto producer in the world, while Brazil occupies 9th place.

OICA statistics also indicate that Iran’s automotive industry has shown 18.6% growth while the sector has seen an 11.2% decline in Brazil.

An advisor to Sindipecas, Elaine Carmo Lima Colnago who was also present in the Tehran meetings, said, “Prior to the international economic sanctions, Iran and Brazil had a long history of lucrative industrial collaboration.”

“Even during the sanctions era, Brazilian auto parts makers eyed Iran as a prospective partner.”

According to Colnago, with the sanctions lifted, Brazilian companies are looking forward to joint production deals with their Iranian counterparts.

She added that Brazilian auto parts makers are looking for foreign partners. “Being the largest producer of auto parts in the Middle East and North Africa makes Iranian firms an ideal industrial partner for Brazilian companies.”

The Brazilian trade mission included presentation sessions on Iran and Brazil automotive markets, visits to plants and companies active in the automotive market, and meetings with representatives of the Brazilian Embassy and officials from the Ministry of Industries, Mining and Trade.