News that Iran’s domestic vehicle market is “close to saturation” is prompting home producers to look at overseas markets, but also at potentially cooperating with foreign manufacturers.
But given Iran’s almost unique isolation among western countries – although France’s Peugeot brand enjoys close cooperation with Iran Khodro to produce significant volumes of its 405, 206, Roa, Tondar, Grand Vitara, Samand and Bardo pick-up – the country is increasingly casting its net wider.
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The move could well be prompted by the fact Iran is currently subject to swingeing overseas sanctions led by the US of course and is increasingly turning to the Islamic world.
Speaking to just-auto today from Tehran, an IKCO spokesman said it was looking at Iraq, Syria and Turkey for new markets, but was also mulling the possibility of working with its Islamic neighbours to produce a joint car.
But Islamic countries not under the cosh of sanctions may well view going it alone without the potential difficulties of Iran as the better option.
These sanctions are not to be sniffed it. Iran has had an extraordinarily turbulent relationship with the west and the US in particular for a very long time. In particular, the rising volume of noises from the west alleging Iran’s involvement in a nuclear programme is not going away.
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By GlobalDataSo Iran clearly needs to think creatively about co-operating – after all Nissan and Renault do it very successfully indeed.
And the country’s position at the historical crossroads between Europe and Asia makes it an ideal base for exports – although doubtless Turkey and Syria would have equally strong views on their geographical location.
There’s another storm brewing that’s about to blow. The IKCO spokesman said Iranian fuel prices were set to rise massively by more than nearly 60% to almost US$1 per litre.
Much as in the west, this is powering development of more fuel-efficient engines using either LPG or more economical petrol versions – in itself no bad thing – but just imagine if the cost of petrol rose suddenly by 60% in say the UK, France, Germany or even the US.
Returning to the saturation issue. Earlier this year IKCO said it set a production record of 680,000 units and had a target of 780,000 this year. And the company is also aiming at the start of mass production of its Runna model with the board meeting next week to discuss dates, while fellow Iranian automaker Saipa recently inaugurated a new plant in Kashan to turn out around 150,000 vehicles per year.
There’s room for growth here surely, although maybe the Sword of Damocles spectre of sanctions hanging over the country is acting as a significant brake.
It will be interesting to see how other Islamic countries react to Iran’s overtures – maybe this is a way through the sanctions impasse.
