بیزینس مانیتور-صنعت خودرودرایران-سه ماهه دوم2011

The Iranian auto industry is continuing to progress through a period of rapid expansion, despite the failure to resolve underlying issues that pose serious questions about the sustainability of the country's car industry. Iran Khodro (IKCO) in particular has continued to ramp up production, with plans to establish new plants and to form new joint ventures (JVs) with overseas firms. The car market in the country is increasingly dominated by domestic producers as the country feels the tightening of trade sanctions in response to the state's nuclear program. A number of international car firms – most recently and notably, Kia Motors – have halted their trade relationship with the country. BMI expects that production will continue to expand in the country, along with various associated opportunities. Continued losses at the major producers are still a major worry, however, as production currently depends on state support to continue and expand. While the Iranian state is unlikely to withdraw such support, the precarious political situation could threaten this state support.

IKCO has announced details of the production plans for its second 'national car', called the Runna. BMI believes this falls into the company's wider strategy of greater self-sufficiency, which includes the development of 'national' products and finding new export destinations as the domestic market becomes saturated. Production of the Runna is scheduled to begin in Iran in mid-2011. During the new Iranian year, beginning March 21 2011, the company aims to produce 20,000 units, according to IKCO's vice president for quality and product development, Mir Javad Soleimani. He also said the Runna will be 'completely compatible with global standards', which will enable the model to play a part in IKCO's export plans.

IKCO has already registered a 13% year-on-year (y-o-y) increase in passenger car production to more than 685,000 units during the period between March 21 2010 and February 16 2011. The carmaker also registered record sales of 658,000 units during the period between March 21 2010 and February 13 2011. Sales rose by 20% during the period, according to IKCO's marketing and sales deputy CEO, Ali Asghar Saraeinia.

Meanwhile, a new car brand is to be launched, involving Iranian and Turkish car companies. While details of the new brand have not been divulged, the new brand will be a JV between IKCO and Hema Endustri. The new brand will target the European car market. It is hoped that access to the European car market could prove lucrative, particularly in offering a lower-cost alternative to established brands.

The first project is intended to be a passenger car which the two firms will jointly develop. While a specific site for production has not been decided, it is known that production is almost certain to begin at a Turkish location, for easier access to the crucial European market. Production may expand to Iran at some point, but it is unlikely that any eventual Iranian production would be targeted at Europe, given the current political situation.