09 March 2005
Iran Khodro, the Middle East's largest carmaker, has ambitious plans to produce a million cars a year by 2011, expanding units in the Middle East, Africa and former Soviet States. Iran Khodro has signed production agreements with Renault and Peugeot, and is looking to be a key producer of the Renault L-90 Logan, a cheap family car. Last week, as reported in The Daily Star, Iran Khodro signed a deal with DaimlerChrysler for a limited number of luxury Mercedes-Benz cars to be assembled in the Islamic Republic this year
"Our target is to increase production to one million cars per year by 2011; it means increasing production by an average of 20 percent each year," the carmaker's Vice-President Javad Dehnadi said in a recent interview.
"Of these, 30 percent will be either exported or manufactured abroad," he added.
"Our target markets where we can compete with others are African, Middle Eastern and CIS (Confederation of Independent States) countries," he added.
Khodro has already signed contracts to manufacture the Samand, Iran's new national car, in Syria and Senegal, but the firm is eyeing new markets in Central Asia.
Dehnadi declined to name specific countries before contracts were signed.
The plant in Syria is due to come on stream in March 2006 with a capacity of 30,000 cars per year. The Senegal plant will start output in September 2006.
Iran Khodro, which is 40 percent owned by government, 30 percent by private shareholders, and 30 percent by investment companies, is based in a 4 million square metre mini-city just west of Tehran. It has been rolling out cars there for over 35 years.
It has 19,500 staff, who, in the year to March 2005, will have increased output 19 percent to 515,000 cars, Dehnadi said.
The Iranian carmaker has a deal to build Peugeot's 206 Sedan, a French design to be produced at Iran Khodro with Iranian investment.
"The Peugeot 206 Sedan will be introduced at the Frankfurt autoshow in October. It will be exported to 47 countries," Dehnadi said.
The company plans to export 25,000 of them in the year 2007.
Renault's L-90 Logan is due to start leaving the factory in September 2006, replacing Iran's rattling, gas-guzzling national car, the Paykan. Khodro also announced last week that the Paykan is to be taken out of production before next March, bringing to an end more than three decades of service.
Altogether, 500,000 L-90s will be made in Iran, 150,000 at Iran Khodro. Saipa, the country's second-largest carmaker, will churn out another 150,000, and 200,000 will be made at a plant to be built by Renault.
Dehnadi said joint projects such as those with French carmakers had benefits for both sides. Foreign automakers are offered a smoother entry into difficult markets.
"Joint projects are a win-win situation; they help us improve our technical capabilities," he said.
But Iran Khodro's ambitious plans have not come easily. He said workers had gone on strike for a two days last year, complaining about their work-load.
"Our press-shop, for example, works in four shifts, because we want to take the most advantage of our 200-million-euro investment," he said, noting the average Iranian worker was not yet accustomed to European standards of productivity. - Reuters
