The Forum for Partners in Iran's Marketplace

June 2017, No. 84



Nematzadeh at the Fourth Tehran Int'l Auto Show

I Am Handing over My Place to Younger Managers!

Nematzadeh said: “I would like to ask the automakers to take measures for promoting their aftersales services as people would judge us from what they see rather than what we like people say.”

"I am supposed to get retired and entrust the affairs to my younger friends.” This statement was made by Mohammad Reza Nematzadeh, Minister of Industry, Mine and Trade. He made the remark on the sideline of the 4th Tehran International Auto Show and Conference in February.

In the meantime, he urged the authorities to pay attention to auto industry. “Of course, I am expected to retire and pass the state of the affairs to my younger friends. But, paying attention to the auto industry should become a criterion for the officials.”

Remarks of this kind are more like bidding farewell! For the 71-year-old Mohammad Reza Nematzadeh who was called the grandfather of industry when he was at the parliament to get a vote of confidence, it is considered a type of goodbye. Especially when he says: “Of course we are expected to retire and have done our part in this regard but these conferences should continue and I will participate in such programs as long as I live.”

This is the fourth year that automakers invite their foreign counterparts to Milad Tower in order to encourage them make investment in Iran. All through these four years many promises have been made but so far nothing has been realized. That is to say, no new car has been manufactured out of these visits and the quality is the same as before. A year after the Joint Comprehensive Plan of Action (JCPOA) of course the Europeans have paid more visits to the auto making factories, however, even if reports have been released on the new agreements, no details are available about them.

Mansour Moazami, Head of the Executive Board of the Industrial Development and Renovation Organization (IDRO), says that automakers after JCPOA have signed six new agreements: This can create new hopes in the hearts of Iran auto industry.

The fourth conference of the automakers of course had a specific point and that was the low profile presence of the Chinese. The Chinese who had managed to prepare a good market for themselves in Iran during escalation of Western sanctions, have gradually lost their presence in the post-sanctions era so that some statistics point to a drop of up to 30% in Chinese production in 1395 (2016-2017).

It seems that with the gradual withdrawal of the Chinese and the strong presence of the Europeans and well-brand Asians, the Iranian auto market, as mentioned by auto managers, will be diversified and more attractive at the same time. Presence of auto managers from around the world along with managers of European brands and even major directors of auto representative offices, who are trying to open offices in Iran, is indicative of the fact that bravery of automakers is more than other investors for maintaining presence in Iran.

The host of the conference was Nematzadeh. During his ministerial position, automakers have communicated with him more than other sectors of industry. Perhaps it was for the same reason that they showed their appreciation of his support with their constant applause. Of course, Nematzadeh spoke explicitly. He urged the Koreans to “take the straight course and sign contracts with Iran that would consider domestic provisions and terms.” He even explicitly declared: “We still do not endorse the deal with Kerman Motor unless Hyundai would accept domestic production in Iran and of course export of the product.”

Nematzadeh, by stating that the contract with Renault is in its final stages and would be finalized soon, said: “I would like to ask the automakers to take measures for promoting their aftersales services as people would judge us from what they see rather than what we like people say. On the other hand, when we started our activities, biased criticisms were made about the auto industry which it did not deserve.”

Benz and Volks Wagon to Enter Iran

The most important news announced by Mansour Moazami, Deputy Minister of Industry, Mine and Trade was signing a contract with Benz and Volks Wagon by the end of the current year, 1395 (year ends March 20). Moazami said: “The contract for Benz and Volks Wagon will be finalized by the end of the current year. We are never after signing contracts with a specific brand and our doors are open to all automakers of the world but under certain conditions.”

Referring to the necessary conditions for concluding an auto contract, he said: “As it has been repeatedly said the condition for exports, the maximum use of the domestic potential, transfer of knowledge and technology along with after-sales services are Iran’s main terms for cooperation. But the main point in this case is that we want to become an automaker rather than produce therefore we are after automakers that empower us in auto designing.”

Moazami stated: “During 1395 (2016/2017) Iran Khodro signed a contract with Peugeot the joint product of which will be presented to the market in the month of Esfand (February/March). Also, SAIPA Company has signed a contract with Citroen to supply their product to the market in the first half of the next year (starting March 21).

According to Moazami, IDRO has also signed a contract with Renault the joint product of which will enter the market by the end of the next year, 2017, or the first quarter of 2018.

He also referred to the signing of a contract for production of automatic gearbox and said: “Volks Wagon Company has reached agreement with an Iranian automaker and is on the verge of signing a contract. The Hyundai Company has also signed a contract with an Iranian automaker the products of which will be supplied to the market in future.

Italian-German Company to Help Iran Design National Platform

Managing Director of Iran Khodro Company also talked about signing of a contract with an Italian-German company for designing the national platform and said: “This contract will be concluded for the production and designing of accent gearbox and finally an auto national platform in Iran.”

Hashem Yekeh-Zare in response to domestic criticisms addressed to auto deals with foreign firms, said: “Iran’s auto market is $130 billion and if we fail to cooperate with the big automakers for auto production this volume of capital will go out.” 

One Auto Every Year

Also speaking at the forum, Managing Director of SAIPA said: “I want to fulfill the promise I have previously made and as of next year present one new auto to the market every year.”

Mehdi Jamali also promised to unveil the national platform soon. He even pointed to the solution of the last year financial problems of his company  and said: “Automatic SAIPA will be made available by the end of the year and SAIPA 212 will be sent to the market with new facilities. SAIPA has passed behind all its financial crises and today auto output in the company stands at 2500 cars. Reform of financial structure of SAIPA has been designed by relying on domestic knowledge and has caused many changes. Last year I made some commitments to the Ministry of Industry, Mine and Trade which were very hard. We undertook that SAIPA can be a new criterion for designing the financial structure.”

Stating that SAIPA has had 54% production growth, Jamali stressed that SAIPA’s market share has made a 6% growth.


Subscribe to

  June 2017
No. 84