(MENAFN- Trend News Agency ) Tehran, Iran, December 18
By Mehdi Sepahvand - Trend:
Iranian auto part makers will provide Peugeot with the parts it needs in its Algeria site, according to Hashemi Yekke Zare, the CEO of Iran-Khodro car manufacturing company.
Besides that, Iranian part makers can also invest in Algeria to produce there and sell their products to Peugeot, Zare noted during a ceremony to present new Iran-Khodro products, Trend correspondent reported from the event.
Peugeot maker PSA Group (PEUP.PA) in November signed a joint venture agreement with three Algerian partners on Sunday to build cars in the North African country.
The French carmaker said it would invest around 100 million euros (88.44 million pounds), equalling 49 pct of the joint venture's capital.
Referring to the auto industry as one of the most lucrative industries in Iran, the Iran-Khodro chief noted that car makers have saved Iran as much as $15 billion in one year by eliminating the need for imports.
Elsewhere, he noted that 80 percent of a car's quality comes from its parts, underlining that the Iranian part making industry is growing old and needs fresh investment.
Addressing Parliament Speaker Ali Larijani who was present in the event, Zare said more help such as loans from the National Development Fund are needed to help the industry up to its feet.
"After the Joint Comprehensive Plan of Action (JCPOA), we made attempt to ensure that we move on the path to indigenizing production up to 70 percent and also leaving room for exports of 30 percent of our products," he noted, adding, "The time is passed when Peugeot would treat us the way they wanted. We have made strong demands and are pursuing them."
Shortly after the JCPOA went into force in early 2016, Iran-Khodro signed a deal with Peugeot to jointly produce Peugeot 2008 SUVs. The JV, called IKAP, is currently producing the model and is expecting production of newer models of sedans in the coming months.
On December 4, Mohammad Reza Najafi Manesh, the chairman of the Auto Part Makers Association of Iran, told Trend that as major Iranian car producers are starting joint ventures with European and Asian partners, part makers in the country are hopeful that they will see considerable growth in their market.
"These are goods steps that are being taken, the international cooperation that followed the JCPOA are becoming operational," he said.
Car manufacturing in Iran during the first seven months of the current fiscal year (since March 21) had a 21 percent rise compared with last year's corresponding period.
In the last fiscal year, which was the first post-nuclear deal year for Iran, car, bus and truck production output indicated around 40 percent year-on-year growth.
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