Violence Hasn’t Sidetracked Iraq Auto Production

VIENNA – Safe for now from the resurgence of violence in Iraq, automakers from neighboring Iran and from China are growing the country’s auto industry.

Some cars sold in Iraq are locally assembled. Iranian automakers Iran Khodro and Saipa, as well as China’s Lifan, are the main foreign manufacturers that export assembly kits to Iraq.

Iran Khodro, Saipa and Lifan models, as well as cars from China’s BYD, are assembled under one roof at a plant jointly operated by Iraq’s State Company for Automotive Industry (S.C.A.I.) and Zamzam Spring in Al Iskandria, also known as Alexandria, about 25 miles (40 km) south of Iraq’s capital Baghdad.

The three weeks of fighting between Islamist militants and government security forces mostly has taken place north and west of Baghdad.

There are no reliable data about Iraq’s automobile market. According to Lifan, the country’s total market was about 140,000 cars in 2013. S.C.A.I. and Zamzam Spring are negotiating with General Motors about the assembly of Chevrolet cars.

But Ali Abbas, marketing manager-Zamzam Spring, tells WardsAuto, “There is no decision about Chevrolet assembly yet.”

The Egyptian importer and assembler Ghabbour Auto, which imports Hyundai cars into Iraq, is another important player on the market. The company sold 5,329 Hyundai cars as completely built-up imports in Iraq in first-quarter 2014, compared with 6,656 year-ago.

Hasan Amouzade, Deputy CEO of Saipa, recently said the Iranian automaker has finalized a contract for export of 25,000 Saipa cars to Iraq. This figure likely includes assembly kits.

Zamzam Spring is a local distributor that sells imported and locally assembled vehicles from China and Iran as well as Chevrolet cars and Isuzu, Mack and Volvo trucks. Total investment in the plant exceeds $100 million, the company says.

But during the official opening of the S.C.A.I. factory in Al Iskandria in March, guests could see a small exhibit of cars, including a Chevrolet Malibu, with a legend that suggested plans for local assembly.

In addition, S.C.A.I. plans to assemble cars under its own brand. One such car, also exhibited in March, was an Iranian-made Saipa Tiba small sedan, which is among the models assembled in Al Iskandria. However, instead of the normal Saipa badge the car had a S.C.A.I. badge at the front. The badging at the rear included the Latin letters S.C.A.I. and the word Tiba in Arabic language.

According to Ali Abbas, the first cars wearing the new badging may appear soon. It is not clear whether the Tiba would be the only model sold under the S.C.A.I. brand.

The newest model built at the Al Iskandria complex is the Iran Khodro Runna, which went into production in May.

Iran Khodro and other Iranian automakers are profiting from the fact that Iraq is a neighboring country.

“The quality of Iran Khodro cars and the widespread network of sales and aftersales service in the different provinces of Iraq have resulted in great popularity of these cars,” Ahmad Shirazi, production manager-Zamzam Spring, says in a statement.

‟Geographical proximity of Iran and Iraq is considered as a noticeable advantage for Iran Khodro as is the low cost of shipping and transport and the provision of spare parts in Iraqi market in the shortest possible time.”