Nissan, Kia to Restart Ties With SAIPA

EghtesadOnline: SAIPA auto company is to sign two joint production deals with East Asian automotive giants Nissan and Kia.

News ID: ۷۷۷۶۸۶

16 July 2017

The two companies previously had a strong presence in Iran.   Kia currently sends complete knock down (CKD) kits of the older version Kia Cerato as part of a assembly deal with SAIPA.

With sanctions lifted, the two carmakers have been eyeing Iran  as a major market and potential partner, Financial Tribune’s sister newspaper Donya-e-Eqtesad reported earlier this week.

According to CEO of SAIPA, Mehdi Jamali, prior to imposition and tightening of sanctions, Nissan had an exclusive production and representation deal with SAIPA.

“Through a new joint venture Nissan is set to resume operations in Iran,” Jamali told reporters without elaboration.

He said a SAIPA-Nissan joint venture deal will be signed in the near future and several models of Nissan cars will be locally produced. However, the CEO did not go into details about what is on the agenda.

Iran previously assembled the Nissan Qasqhai in 2008-11as part of a CKD deal with the Japanese firm.

>Kia Upping its Presence

Regarding the Kia deal, Jamali said “Even during the sanctions era (2011-2015) the South Korean company was present in Iran and collaborated with SAIPA.”

Kia's sister company Hyundai currently has a joint production deal with independent carmaker Kerman Khodro. The two firms assemble the Hyundai i10 and i20 models and plan to later add the Accent to its local production lineup.

>Dealerships by the Back Door

It was recently announced by the government that car companies who import may have to forge partnership agreements with local car companies to also produce the vehicles in the country.

The Ministry of Industries, Mining and Trade last week announced a proposal that could delegate the sales of foreign brands like Nissan and Kia to companies like SAIPA.

It wants auto importers to invest “twice the value of their imported cars in local firms, or they will not be allowed to bring foreign cars into the country.”

The proposal is currently being studied by the Rouhani administration. After okayed by the Cabinet, the proposal will be sent to parliament for final approval.

According to the ministry, the proposal is aimed at pushing foreign carmakers with major shares in Iran’s automotive market to increase investment in the domestic auto industry.