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Xantia from Iran

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Citroen has agreed that Saipa would serve as a center for exporting Xantia to the Middle East, Central Asia, Russia and Ukraine

On February 18, 2000, a 150-million-euro contract was signed between Saipa Co. of Iran and France’s Citroen in Paris for joint production of automobiles. Here is an account on the contractual agreements by both sides and the impact of the contract on Iran’s auto industry:

Based on the Saipa-Citroen contract, the French company would buy 13,500 automobiles from Saipa in a period of one year. The value of automobiles is estimated at 150 million euros. Another undertaking by Citroen is that the French partner would provide Saipa with the tools and models as well as decorative equipment for automobiles. And Saipa would become a major center for exporting Citroen vehicles to newly independent countries as well as the Persian Gulf littoral states. It can also export its products to Turkey, Russia, Ukraine and other countries.
Through signing the said contract Saipa has succeeded to receive French know-how in auto manufacturing without the transfer of any forex, and would act as a center for the export of Xantia cars.

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Cooperation between the two sides was discussed for the first time in 1994, but since Saipa today has new technical facilities and human-force capabilities, the terms of the recently-signed contract are now most suitable for Iran, comparing to what was considered back in 1994.
In order to have an auto industry independent from forex and to show Iranian capabilities in auto manufacturing to the French companies, Saipa’s officials have held lengthy meetings with Citroen in the past year. The Citroen officials visited Saipa and became familiar with Iranian competence in building auto parts which are exportable to countries including France. In the contract signed between Saipa and Citroen for production of Xantia, the French side agreed to receive Siapa’s automobiles instead of receiving forex from Iran. In other words, the total purchase from the French company is equal to the amount Citroen would buy from Saipa.
Based on the contract, Saipa is to export molds and fixers necessary for production of automobiles to France and this has been approved by the French specialists with respect to the high quality of Iranian products.
Moreover, Citroen has agreed that Saipa would serve as a center for exporting Xantia cars to the Middle East and Central Asian regions as well as Russia and Ukraine. Another part of Saipa’s products would be exported to Citroen’s international network through which they would find their way to other countries with Saipa’s mark on them.
Saipa-Citroen contract is valid for a period of five yeas, after which production of new models would be dependent on the French side’s approval. Since the beginning of production of Xantia in Iran, 40% of its parts would be made domestically.
At least 6,000 Xantia cars would be manufactured in Iran while 4,500 of this figure would be exported. In 2001, some 9,500 out of total 12,000 cars to be made in Iran, would be sent abroad for sale. The following years would witness a growth in the production and export of Xantia by Iran.
These types of contracts can serve as a prelude for a new movement in Iranian auto industry directed at the self-sufficiency of this industry from the forex revenues of the country and at demonstrating Iranian technical capabilities to the world. Production of Xantia, a very successful product in France, would make a real change in Saipa, which has moved into manufacturing medium size cars from previous small size ones. With launching Xantia’s production line, the manufacturing of Renault and Pride cars would not be stopped in Saipa.