Iran's State Industrial Firm to Facilitate Investment

EghtesadOnline: The Industrial Development and Renovation Organization of Iran (IDRO) says firms wanting to benefit from its support must first meet its terms and conditions.

News ID: ۷۷۶۹۷۸

13 June 2017

IDRO, created in 1967, is one of the largest state-owned industrial firms and has significant investments in industrial and automotive companies, including major carmakers IKCO and SAIPA Group.

It said it would prefer Iranian companies to work with established brands (western) and not firms with little or no record in the auto industry, Asre Khodro reported on Sunday.

Cars from East Asia, particularly China, have become increasingly popular in Iran, and several firms have grown in popularity and recognition due to their lower prices compared to European brands, Financial Tribune reported.

These firms have often been criticized by local automotive groups and media outlets for jacking up prices, sometimes at more than 50% of the price in China.

The sudden increase in the import of Chinese vehicles came after the Europeans pulled out of Iran after international  sanctions were tightened in 2011.

French firms like PSA Group and Renault, either greatly reduced their presence or in the case of PSA's Peugeot brand, pulled out of the market entirely leaving their local partner Iran Khodro Group scrambling to produce parts which were previously imported from France.

Iran’s new industrial development policy stipulates that  foreign automakers wanting to sell in Iran "must also transfer technology and share expertise."

IDRO Master Plan

IDRO, according to its official website, embarked on its "master plan", which is to help support the private sector through aiding foreign companies in entering Iran. In essence, the state firm, would help private companies to create new ventures and act as a vehicle to facilitate development.

The latest venture widely publicized was with France's Renault in 2016, where IDRO became the main partner with the Paris-based firm to sell brands like the Duster, Sandero and possibly low-cost Kwid model in Iran.

The joint venture will produce an estimated 150,000 cars a year when fully operational by the end of 2017. It was previously reported that the industrial city of Saveh, in south of Tehran, would be the production center for the joint project.

The organization's share could increase up to 49% in advanced industries' projects.