Iran-Azerbaijan Automotive Collaborations Take Off

EghtesadOnline: The very first products of a joint venture between Iran Khodro and Azerbaijan's AzEuroCar LLC are set to go on sale in the coming days under the brand name Khazar.

News ID: ۷۸۲۸۷۲

10 June 2018

President Hassan Rouhani's chief of staff has said with Iran's assistance, the factory will manufacture 10,000 vehicles on a yearly basis at the production plant located in southeast Azerbaijan in the Neftchala Industrial District, ISNA reported.

The announcement was made during a news conference held on the occasion of Mahmoud Vaezi's two-day trip to Azerbaijan's capital Baku earlier this week.

According to Financial Tribune, he added, "The factory's production capacity will soon be increased to 30,000 units per year."

The production site has been established under a joint venture deal signed between IKCO and AzEuroCar in August 2016. The contract aims to expand partnerships between the neighboring countries and serve as a test bed for bilateral ties.

Azeri President Ilham Aliyev has praised the JV as "a manifestation of Iran-Azerbaijan relations."

The total cost of the project is estimated at 24 million mantas ($14 million), with IKCO providing 25% of the overall investment needed for setting up the factory. The remaining 75%, translating into $10.5 million, was put forth by Azerbaijan.

The Azeri republic hopes to export vehicles produced in the factory to Ukraine, Russia and Central Asian countries.

Furthermore, the country aims to stabilize prices in the automotive market of Azerbaijan by minimizing dependency on imports.

>Models on Offer

The plant has currently produced 100 vehicles under the brand name of Khazar. The vehicles which are dubbed Khazar SD and Khazar LD will go on sale in the early days of next week, according to Emin Akhundov, chairman of the board of Khazar auto factory.

Khazar SD has been priced 16,000 manats ($9,384) in the market and Khazar LD will cost costumers 18,000 manats ($10,557).

The first customers of the models are Azeri state bodies, the ministries of economy, energy and taxes. Several orders have already been placed for the vehicles as of now.

The Azeri side of the JV, AzEuroCar has announced that all the cars produced through their collaborations with IKCO meet Euro 5 standards.

>Budget Family Cars

The models which are manufactured at the factory are budget family cars popular in Iran. Among the vehicles named in previous reports which are to be produced in Azerbaijan are Dena, Runna and Samand.

In addition to the three models, two Peugeot models namely 206 and 207 along with Renault Logan (locally better known as L90) and a pickup truck based on the same model will be also assembled in Azerbaijan.

Officials with Khazar are yet to provide detailed specifications of each model for the Azeri market, but so far the published photos from the company's production lines depict the sedan model designed in Iran, Dena bearing the badge of Khazar Company abbreviated as KH.

Mass production of Dena began in 2013 and hit the streets in Iran in autumn 2014. The vehicle is built on the early Samand's platform, Iran's first homegrown car.

IKCO produced 43,088 units of the model during the year which ended in March in Iran, up 53% from the year before.

Among the listed cars, Samand is the most popular in Iran, with an output of 106,825 units in the last Iranian year, a 4% YoY increase.

Runna, smaller than the Samand, is an Iranian-designed small city sedan. The model's production rate stood at 6,941, indicating a 43% year-on-year decline.