Iran-Turkey Automotive Deal on the Anvil
EghtesadOnline: Talks are underway between Iranian officials and their Turkish counterparts over the establishment of an automotive joint venture, a deputy industries minister said.
Hossein Modarres also told Tejarat News that the two sides are working on a deal that envisages the joint production of passenger vehicles.
“As soon as the terms and conditions of the agreement are finalized, it will be launched,” he said.
In an effort to accelerate the process, Iranian officials have identified an industrial area in the country, which Modarrres says is suitable for establishing the car manufacturing plant, according to Financial Tribune.
"Besides passenger vehicles, the deal also envisages collaboration for manufacturing a number of other industrial products," he said.
The move is in line with the ministry's policies on forging cooperation with regional countries to bolster the industrial sector in general and the domestic auto market in particular.
International carmakers with decades-old presence in Iran pulled the plug on their operations after Washington imposed blistering sanctions against Tehran last year.
Some of the car companies that have curbed their Iran ties are France’s Peugeot, Renault and Citroen, along with China’s Brilliance, Haima, Dongfeng BYD, Great Wall, MG and Lifan.
In addition to Turkey, Iran is seeking to establish automotive joint ventures with Russia.
Referring to the fraught conditions of Iranian auto industries, Ahmad Nematbakhsh, the head of Iran Vehicle Makers Association, said such partnerships are a last resort for Iran’s auto industry.
Nematbakhsh noted that some 150,000 unfinished vehicles are gathering dust in the warehouses of local carmakers, as they do not have the auto parts to complete the vehicles and deliver them to customers.
Since June 2018, Iran’s auto production has been plummeting, due to mismanagement and inefficiency, despite a clear monopoly, unprecedented price hikes, large-scale presales and handsome state bailouts.