Iran Khodro Prioritizes Russian Market

Date: 15 August 2022 - 21:41

News ID: ۱۰۵۷۹۰

TEHRAN -- Iran’s leading automaker is seeking to prioritize exports to Russia, its CEO said, as both countries are under Western economic sanctions.
Iran Khodro unveiled the latest model of its crossover Rira vehicle at its factory west of Tehran, where CEO Mehdi Khatibi announced the manufacturer’s ambitions for the Russian market.
“We are going to pay special attention to the Russian market, and we are also thinking of partnering with Russian investors,” he said.
“We have held good negotiations with Moscow. The Russian market, with its capacities, will be one of our important markets,” Khatibi added. “We will begin exporting this year” to Russia, he said.
Iran Khodro had previously exported vehicles to Russia, notably between 2007 and 2009, Iranian media said.
The new announcement comes after Russian President Vladimir Putin visited Tehran in July and met his Iranian counterpart Ebrahim Raisi and Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei.
Putin has ordered his government to quickly come up with new measures to support the domestic car industry amid a crunch on demand from Russian buyers and severe logistics problems as a result of Western sanctions.
Russia has come under increasingly tough sanctions since its February military operation in Ukraine, while Iran has faced stringent sanctions reimposed in 2018 when the United States unilaterally pulled out of a nuclear deal between Tehran and world powers.
The two countries have responded to the sanctions by boosting cooperation in key areas to help prop up their economies.
Iran Khodro’s vice president, Kianoush Pourmojib, struck an optimistic note on Sunday, pointing to increased exports to Azerbaijan over the past five years.
“We are ambitious about improving the quality of our vehicles,” he told AFP.
He added that while the manufacturer hopes to compete in markets such as Azerbaijan, Oman and Iraq, “in volume, it is of course Russia that is the most important”.
“This year, we will produce more than 500,000 vehicles and our goal within three years is to export 100,000 vehicles annually,” compared with fewer than 20,000 currently, he said.
The Ukraine war has upended car production in Russia which is the eighth-largest automotive market in the world. Several global manufacturers have halted deliveries to Russia, while others have been forced to pause production due to a lack of parts.
In May, Iran’s official news agency IRNA said a leading Russian automotive company had sounded out Iranian parts and equipment manufacturers on the possibility of supplying its production lines with required products.
Master cylinder brake boosters, hydraulic anti-lock braking systems, ABS sensors, seat belts, airbags, alternators, air conditioners, oxygen sensors, thermostats and window lift systems are among the parts demanded by the Russian automaker,

a member of the Iranian Auto Parts Manufacturers Association (IAMPA)’s presiding board, Hossein Bahrainian said then.

Iran’s auto sector has started standing on its own feet after years of reliance on imported car kits which foreign companies stopped supplying when the U.S. reimposed sanctions on the Islamic Republic in 2018.

Iranian automakers picked up the slack after France’s Peugeot and Renault exited Iran along with other international companies in the wake of U.S. sanctions which created a supply crunch which saw car prices vault to unprecedented highs.

The crisis forced Iran Khodro, Saipa and other companies to pool up local resources to produce Iranian-made vehicles, with the defense ministry joining in to manufacture some of the hi-tech parts which Iran used to import.

Local manufacturers are now producing a wide range of parts. Western sanctions on Russia and Iran have prompted the two countries to boost cooperation in key areas to help prop up their economies.