Iran Khodro Company is in talks with India's Tata Motors to set up a joint venture for assembling its gasoline cars in Iran, as Tata looks to tap the fast growing market that has just emerged from sanctions.
Tata Motors is talking with the Iranian car manufacturer for a joint venture to assemble knocked down units of the gasoline versions of its models, including the latest compact car Tiago, Bolt and Zest, which are powered by the company’s new Revotron gasoline engines, sources said in Tehran.
Knocked down version of the cars will be imported and assembled at Iran Khodro’s manufacturing facility after adding local contents like tires and batteries, The Hindu Business Line reported.
Tata Motors will use Iran Khodro’s sales network to sell the cars.
The branding will be of Tata Motors and Iran Khodro will be just a contract manufacturer, they said, adding that Tata Motors will start assembling in Iran in less than two years.
Initially, Tata Motors is looking at 100,000 cars a year, which will be gradually ramped up.
Production at the factory, which may be located in suburban Tehran and Masad, is slated to begin by 2018.
Iran Khodro had earlier this year renewed its partnership with French manufacturer PSA Peugeot Citroen.
Iran Khodro Company (public joint stock) was founded in August 1962. Starting with contract manufacturing of sedan Paykan for British firm Rootes in 1966, it has manufactured for France’s Peugeot as well as the Tondar 90 sedan (Renault Logan). It manufactures several Chinese models now.
Peugeot had earlier this year signed a contract with Iran Khodro to start a joint venture that will make three new models. Its January 2016 deal marks its return to Iran after a four-year absence.
Iran Khodro, which is 14%-owned by the Iranian government, was Peugeot’s former partner before the French company’s decision to shut down its operations in 2012 in the wake of international sanctions.
Before 2012, Peugeot would send parts, which then were assembled in Iranian plants.