Establishment: Kish Khodro company was established based on a number of reasons: A shortage of cars on the market which is still felt, the lack of a vehicle which would conform with modern standards on the Iranian market, an obvious difference between supply and demand on the car market, lack of variety in terms of the age of users, and the lucrative market of cars in Iran.
This is while the main objective for the company was to make a car with the potential of being exported to international markets. The company was set up in Kish Free Zone, where the industries are required to export at a value equal to the foreign exchange they use. This venture had never been experienced by an Iranian auto manufacturer.

Status in FTZ: We, in Kish Free Trade Zone, have no relations with the government in terms of quotas, rents, etc. The only determinants of the market are supply and demand which is the right way to do it. Contrary to other free trade zones in the world, expenses here are very high and this has a direct impact on final prices. Kish Khodro earns its foreign exchange needs only from exports. This is while it can only offer products on the domestic market equal to the value added it gets on the commodity, and the rest must be exported.

Exports: Kish Khodro has no difficulty with exporting its cars, since the products have received a good welcome in a couple of exhibitions we have participated recently. In the recent years, much progress has been made in manufacturing auto parts in Iran and we have also benefited from this progress. But in four months, we are supposed to receive “industrial auto parts” which are exportable.
The Persian Gulf countries are potentially very good markets for our cars. CIS is also a good market, but since we cannot produce cars without air-conditioners, we may not be able to export to those countries.

Economical?: It is said that making automobiles is not “economical” in our country. I believe it is not economical at the current production capacity. As compared with foreign countries, the production of cars can be done here with minimum costs. As described by UNIDO, the needed investment for production of each car is about $5,000. The costs here are no more than this, and in the meantime, under certain circumstances we are able to replace our cars with a new type each year. However, we cannot produce auto engines in Iran, neither can many large auto-making companies like Daewoo. The main reason is that manufacturing engines is not economical for many companies.