| With all eyes on China, it seems that
many carmakers are overlooking ripe areas like Iran. The country boasts
a competent infrastructure, a substantial history of vehicle making, thus
an adequate supplier base, and last but definitely not least a population
with something like 75 per cent under the age of 25.
Peykan is Iran's only 'national'
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Iran is by any standard a booming and profitable new market for carmakers
and the French, it seems have particularly been quick to make their mark
there. Renault's been investing heavily in the country (see box below),
but it is PSA Peugeot Citroen that has been perhaps
the most ingenious.
"Although in total volume terms the markets are still modest, carmakers
wishing to grow faster than the world average should make sure the Middle
East markets form part of their global growth strategy," says Tim
Armstrong, senior analyst with the Global Insight Automotive Group. "In
contrast, growth in Africa has been much lower. In 2002, Morocco, Egypt,
and South Africa were just 8 per cent larger than in 1995."
Global Insight's new Global Insight Middle East and Africa forecast report
provides commentary and analysis on macroeconomic developments, vehicle
segmentation trends, brand competitive prospects, production trends and
outlook and legislative trends. The current report covers the period from
2000-2008 with a spot forecast for 2013. Countries covered include Saudi
Arabia, Bahrain, Oman, Qatar, Kuwait, United Arab Emirates, Iran, Israel,
Egypt, South Africa, and Morocco.
A national car
Iran has its own 'national' car, the Peykan, based on the British Hillman
Hunter, which has been around for practically as long as Persia was renamed
Iran. Samand, the new model has been available on the market since 2002
and is 80 per cent local made. Production was slow to start with at only
40 per day, but this number increased to 350 within a year. The aim was
that by 2003, about 100,000 vehicles would be produced each year.
The largest national automotive company, Iran Khodro Industrial Group,
has in the past produced some very successful models such as Peugeot RD,
Pars, Limousine and the Peugeot 206, with the cooperation of the French
carmaker. It now plans to produce a Mini Peykan for low-income families.
Iran Khodro would like to ideally year-by-year reduce the number of Peykans
produced and replace them with the newer models, reducing the share of
Peykan in its total production from 95 per cent, not so long ago, to 38
per cent in the near future.
Since 976 much progress has been made in various areas of production.
An effective research and development centre was set up and a lot has
been done to improve has production and create higher quality automotive
parts.
However, despite the great success of the previous Pars model, the Samand
has been called the 'national automobile' because of the greater effort
made by Iranian personnel in its design and development.
Iran Khodro is the national Iranian car manufacturer
and besides continuing to make the trucks, buses and the national
car "Peykan", they are now producing a new Peykan which
the first car that is completely designed and manufactured in Iran
and uses Iranian parts. Also they've been producing "Peugeot
405" for over ten years and now most parts are being produced
in Iran. They have a version of Peugeot 405 called "Peugeot
Persia" which is redesigned and produced in Iran. More than
a year ago the Iran Khodro started the production of the new "Peugeot
206" in Iran which is one of the most popular cars in Iran.
SAIPA For the past 30 years, SAIPA has been working hard to give
a significant boost to its ability in manufacturing of high quality
passenger cars and pick-ups. The consequent achievement can be traced
from the original assembly of the two-cylinder Citroen mini passenger
car “Dyian” to the manufacturing of “Renault 5”
and “Renault 21” and presently the production of small
passenger cars, “Nasim” and “Saba” which
are 4-door and 5-door cars respectively, and the 2-ton load capacity
pick-ups called “SAIPA 24” for the local and export
markets. Today SAIPA is the Iranian company with more new models
than any other company.
Pars Khodro Pars Khodro which has become a subsidiary of SAIPA is
the leading manufacturer of SUVs in Iran. The most common SUV is
Nissan Patrol which was manufactured using Japanese parts but is
now being produced completely in Iran.
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A safe investment
The recent fifth international automotive show in Iran lured in 850 domestic
and 150 foreign companies and provided solid interaction and consolidated
communications in the technological, imports and exports sectors.
Director of the Industrial Development and Renovation Organization (IDRO)
Reza Veyseh said at the conference that joint companies from Iran, Southeast
Asian nations and Japan account for a remarkable share of automotive manufacture
in Iran. France handles 20 per cent of the Iranian market and its major
output is Peugeot. Domestic producers build over 80 per cent of Peugeot
parts to bring down the share of the French to below 5 per cent.
Referring to solicitations for marketing of domestically manufactured
products, the official said the vehicle making sector would at least export
over $150mn worth of products this year (to March 2004). In the year leading
up to March 2003, automotive part exports earned Iran $120mn, and the
domestic market is not yet saturated although 750,000 passenger cars have
not been exported.
The exhibition focused on customer satisfaction, up-to-date delivery and
competition in the international arena. Quality and after-sales services
represent the main index for costumer satisfaction and taking into account
the growing prices of goods, cars were the only products whose prices
were on the decline this is mainly because carmakers have agreed to account
for 6 per cent of duties to avert price hikes. Plans are under way to
boost the quality of cars by 50 per cent and the automakers have to adjust
their products with new standards.
Abdol Hamid Javadi, managing director of IDRO International Trading Company,
told reporters that new marketing persuaded 70 per cent of foreign countries
to attend the exhibition with the western section of the fairground being
allotted to foreign companies.
Veyseh said new models of the national car Samand would hit the market
by March 2004. The fifth exhibition showcased Toyota, VW, Jeeps and heavy
cars for the first time. Managing director of Iran Khodro, Manochehr Manteghi,
said his company intended to cooperate with the internationally recognised
producers like Peugeot and DaimlerChrysler. Only under the auspices of
cooperation with well-known carmakers, can Iran Khodro reach the international
standards for car manufacture.
Renault gears up for Iranian
revolution
By Maurice Glover and Dean Slavnich
June 2004
Engineers at Renault are on target to launch a new class of family
car costing just €5,000 ($6,100). Production of the breakthrough
model, seen as one of the biggest challenges undertaken by the motor
industry in recent years, is set to get under way in the next few
weeks, confirmed Renault CEO Louis Schwietzer.
Due to be launched at the Paris show and in the showrooms from October,
the Megane-sized car will be built by the French company’s
Dacia subsidiary in Romania, initially for the domestic market.
But it will also be supplied to other central European markets from
manufacturing bases in Morocco, Russia, Columbia and Iran.
“This is just the first stage. There will be other production
centres – possibly even one in China – and our ambition
is to reach annual volumes of around 700,000 units by the end of
the decade as the saloon develops into a family of vehicles,”
Schweitzer told AE in a recent exclusive interview.
“I gave our engineers the challenge to produce a full-size,
five-seater car for €5,000 ($6,100), tax paid, and they have
delivered. The car will come with a choice of petrol and diesel
engines and a range of options that will include anti-lock braking.
These will add to the price, but we will keep the pricing promise
I made when the idea was first mooted five years ago, and I believe
this is a significant achievement,” he said.
The car, code-named X90, which is based on the B platform developed
for the Nissan Micra and the next-generation Renault Clio, features
modern technology and is being built to comply with all European
safety standards.
“We have made use of existing Nissan and Renault components
and have not found new ways to manufacture the car in order to cut
costs. Having a Romanian production base gives us the advantage
of labour costs that are significantly cheaper than in West Europe.
But we have made a good quality product without using too much automation,
and that requires good thinking,” said Schweitzer.
The car has been styled as a three-box model primarily for central
European markets and is not intended to be sold in West Europe.
It will be badged as a Dacia or a Renault, depending on market requirements.
Renault – with Dacia in Romania, Samsung in South Korea and
a successful presence in South America – has become renowned
in tapping into relatively unknown segments with highly suitable
products.
Last month we exclusively reported that Renault would not venture
into the US at least until the end of the next decade, but is instead
concentrating on talks with Nissan’s partner Dongfeng in China.
Now AE has learned the French carmaker is looking to establish a
presence in two key emerging markets in Asia.
“Yes, China is vital, it’s huge and we’re working
to get there, but we’re looking to other places. India and
Iran, I think, will be big markets,” admitted Francois Hinfray,
Renault’s Executive Vice President for sales and marketing
and a member of the board.
Renault has already acted swiftly to get a foothold in Iran, with
Schweitzer only last month officially penning a deal with his counterparts
in three different Iranian organisations to establish a joint venture
company called Renault Pars.
The French carmaker will hold a 51 per cent stake in the new company,
while the three Iranian companies – Iran Khodro, Saipa and
the Industrial Development and Renovation Organisation – will
jointly form the remaining 49 per cent of Renault Pars.
Starting from 2006, Iran Khodro and Saipa will start rolling off
vehicles produced under the joint-venture company from Renault’s
Dacia-derived X90 platform, with each manufacturer having an initial
150,000 units.
Renault sees Iran as a booming automotive market, with only 700,000
vehicles being sold there last year from a population that is thought
to be around 68 million.
Said a Renault spokesperson: “The X90 will do well as it’s
suited for Iran. It was designed for countries in which there is
a strong demand for economical cars built to high quality levels.”
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