SAIPA Corporation has signed a memorandum of understanding for the production of economy cars with the Association of Homogeneous Propulsion Industries and Component Manufacturers on the first day of the 17th International Exhibition of Automotive Parts, Accessories and Assemblies.
More than 600 domestic and foreign companies, including 45 knowledge-based companies, 500 domestic producers and 55 foreign companies from China, Germany, Italy, Turkey, the Netherlands, the UAE, India, South Korea, Taiwan, Japan and Indonesia, have participated in the exhibition that ran from Oct. 31 to Nov. 3, Donyaye Khodro reported.
Abdollah Tavakkoli Lahijani, director general of Industries Ministry, Mohammad Ali Teymouri, CEO of SAIPA Corporation, and Arash Mohebinejad and Mehdi Matlabzadeh of the association attended the signing ceremony.
The two sides have agreed to produce an economy car in the form of a consortium consisting of selected domestic parts makers, component suppliers, designer and distributors.
After the Industries Ministry set the ceiling of $20,000 as the price of foreign cars permitted under the new $1 billion import scheme, domestic automakers are rushing to cash in.
As per the memorandum, Renault’s now-abandoned KWID platform is expected to be used for the production of these economy cars.
This type of collaboration between a car manufacturer and a component manufacturer is the first of its kind in Iran, and is expected to ensure the steady supply of parts and the payment of partnership share to the two entities.
The deal has set an initial turnover of 200,000 economy cars.
“This memorandum is related to the production of economy cars, which was prepared by considering the gap in economy cars and the low purchasing power of people,” Mohebinejad, secretary of the association, said.
“After stopping the production of cars such as Pride and Tiba, which had low factory sales prices, the production of a modern, economy car was included in the plan for the transformation of the automotive industry.”
The official noted that the association will be involved in design, supply and all project issues from the beginning, stressing that everyone's interests should be seen as a “win-win”.