Arab Today, arab today foreign automakers find iranian market has gone local
Last Updated : GMT 04:46:44
Arab Today, arab today
Arab Today, arab today

Foreign automakers find Iranian market has gone local

Arab Today, arab today

Arab Today, arab today Foreign automakers find Iranian market has gone local

Visitors look at the new sedan Dena
Tehran - AFP

Foreign automakers seeking a return to the potentially huge Iranian market with the lifting of international sanctions will find the business environment has changed: former joint venture partners now want to play the game by their own rules.
Iran's auto industry has been a major casualty of penalties imposed over the Islamic republic's nuclear programme, with production plummeting and workers laid off because of the ensuing economic slowdown.
France's PSA Peugeot-Citroen and South Korea's Hyundai left the country altogether, while Renault continues to import parts and assemble cars in Tehran but at a fraction of former output.
Total car production was 1.6 million in 2011, but it had halved two years later.
US sanctions on the auto industry in 2013 were the main cause, on top of American and European bans on Iranian bank transactions abroad.
But the auto sanctions were lifted earlier this year after an interim nuclear agreement was reached between Iran and world powers and a final accord is still on the horizon, raising the prospect of better times for the industry.
That will draw international suitors to Tehran on Monday for the second consecutive Iran Auto Show.
Mercedes Benz, Volkswagen, Renault, Peugeot, Kia and Toyota have confirmed. US carmakers General Motors and Ford were invited but it is unclear if they will attend.
The organisers want to attract foreign investment -- with a population of 77 million the Iranian market is seen as untapped -- but the conditions of a partnership are likely to change.
- More local production -
Under new joint deals, the industry ministry wants 40 percent of production done in Iran to begin with, rising to 85 percent after five years.
Iran Khodro, which has a 54 percent market share in the Islamic republic, plans to return this year to its 2011 production level -- 600,000 cars.
Previously, it had agreements with Peugeot, Renault and Suzuki, but current production is done without foreign tie-ups, Hashem Yekezareh, Iran Khodro's chief executive, told AFP.
"We expect our former partners back in Iran but on the terms that we offer," he said, with particularly tough words for Peugeot-Citroen, noting that "they quit Iran" when the situation deteriorated, adding that they will have "to pay the price for such acts".
Representatives from the French carmaker, for whom Iran was its second-largest market, met Iranian officials in Paris in early October to discuss a possible return.
Iran Khodro now wants a 50-50 joint venture rather than the previous 51-49 ratio in the visitor's favour, encompassing production, sales, technology transfer and access to Peugeot-Citroen's foreign network.
- No preferential treatment -
The partnership stretches back to 1990, but that won't secure preferential treatment this time around.
"We know what Iran Khodro's interests are and we will go to the company that best protects those interests," said Yekezareh.
In early October, Iran Khodro unveiled two new models in collaboration with Renault at a plant in the northern city of Tabriz -- a Captur urban crossover vehicle and the Clio 4.
Eventual production of those vehicles could raise Iran Khodro's market share to 60 percent, but for a major boost to the auto sector a full and final nuclear deal is necessary.
"The day the nuclear deal is signed... business will pick up," said a foreign auto expert who claims a preliminary agreement with Volkswagen's Skoda has already been made. Hyundai and Fiat are also reportedly looking for deals.
Even so, as long as the banking sanctions are still in place, market conditions will not return to normal. And ahead of the auto show some carmakers cite other problems.
The Tehran government's granting of an exclusivity deal on urban crossovers and city compact models to Iran Khodro and Saipa, the country's second-biggest manufacturer, raises questions about anti-competitive practices.
Mostafa Jafari, the commercial director of Kerman Motor, which assembles Chinese brands Lifan and JAC, said his company has the capacity to make those cars and could triple its market share to 15 percent by doing so.
This week's auto show should test foreign and local companies' expectations alike.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today foreign automakers find iranian market has gone local Arab Today, arab today foreign automakers find iranian market has gone local

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today foreign automakers find iranian market has gone local Arab Today, arab today foreign automakers find iranian market has gone local

 



Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Zainab Fadel Oglu designs “Shakerin” mosque

GMT 12:13 2017 Thursday ,11 May

Zainab Fadel Oglu designs “Shakerin” mosque
Arab Today, arab today Seeks to move past rift with Israel

GMT 08:00 2017 Monday ,08 May

Seeks to move past rift with Israel
View News in Arabic - Business: أخبار الشركات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Mozambique's gas boom dream under threat

GMT 16:29 2017 Monday ,08 May

Mozambique's gas boom dream under threat
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Jaguar displays XF Sportbrake line

GMT 14:36 2017 Monday ,08 May

Jaguar displays XF Sportbrake line
Arab Today, arab today BMW sees forecasts in reach

GMT 09:04 2017 Thursday ,04 May

BMW sees forecasts in reach
Arab Today, arab today Climate science: Bad news gets worse

GMT 08:48 2017 Saturday ,06 May

Climate science: Bad news gets worse
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday