IKCO Venturing Back Into Syria, Eyes Export Markets

VIENNA – Iran Khodro Industrial Group, Iran’s largest vehicle manufacturer, and its Syrian partners have reached an agreement to restore their Siamco joint car-assembly facility located in Adra northeast of Syria’s capital Damascus.

“With the withdrawal of anti-government forces from key regions of Syria, Iran Khodro is now capable of restoring its sites in the war-torn country,” Saeed Tafazzoli, Iran Khodro’s Deputy CEO responsible for Export, says in a statement.

While the plant assembled IKCO Samand sedans in the past, current plans are for the launch of new models.

“Based on the agreement, IKCO will put its focus on new vehicles like KCO Soren, Runna and even Dena,” Tafazzoli says. The Syrian site initially will receive 48 Dena assembly kits, 24 Soren kits and 24 Runna kits.

The plant launched Samand assembly in March 2007 and assembled the car under the local model name Sham before the beginning of unrest in Syria. Based on a free-trade agreement between Iran and Syria, Iran Khodro enjoys a relatively high competitive advantage over other car manufactures, the IKCO executive says.

According to Tafazzoli, the company is set to export 600 vehicles to Syria by the end of the current Iranian calendar year on March 20, 2016. However, it is not clear whether all vehicles are to be shipped in the form of assembly kits.

The restart of Syrian activities is part of Iran Khodro’s export offensive for both assembly kits and completely built-up vehicles.

Grabbing Iraqis’ Attention

The company plans to raise its production in Iraq to 3,000 assemblies per month. “IKCO’s rivals have failed to grab the attention of Iraqi people over the past years and that’s why Iraq’s Al Iskandria site has decided to allocate most of its production lines to IKCO’s vehicles,” Tafazzoli says.

The IKCO Samand, Peugeot Pars and Peugeot 405 sedans are among the main Iranian vehicles being assembled in Iraq, with the Arisun pickup joining the portfolio in the near future.

Iran Khodro’s models are assembled at a factory jointly operated by the State Company for Automotive Industry and Zamzam Spring in Al Iskandria, also known as Alexandria, a city about 25 miles (40 km) south of Iraq’s capital Baghdad.

A new project calls for development of an assembly plant in Oman. The Middle East country has made a request to establish a production site there financed by Oman’s government, IKCO’s CEO and President Hashem Yekehzare announces after a meeting with Yahya al-Jaberi, manager of Oman’s free-trade zone of Duqm. Current plans envision initial capacity of 15,000 vehicles per year. According to Yekehzare the Oman site can provide Iran Khodro with easy access to new markets deep in Africa as well.

Iran Khodro also has begun exporting vehicles to Algeria. A memorandum of understanding signed with an Algerian partner includes the export of 15,000 vehicles to Algeria and the establishment of an assembly facility in the country.

According to Tafazzoli, IKCO currently has three options for the Algeria project: move its existing assembly equipment from a plant in Senegal to Algeria; move equipment which had been used for production of the Bardo, an old pickup model, from a plant in Tabriz, Iran, to Algeria; or install a new production line.

IKCO’s new production facility will be established in a region about 180 miles (300 km) away from Algiers, the capital, with an annual capacity of 30,000 vehicles, Tafazzoli says.

In addition to foreign activities, Iran Khodro is increasing its export shipments of CBU vehicles to new markets including Lebanon, Tunisia and Central Asian countries.