Tata Motors in talks to establish car unit in Iran

Initially, the company is looking forward to assemble 1 lakh cars. 

The Dollar Business Bureau

Mumbai-based multinational automotive maker, Tata Motors, is in talks with a local manufacturer of Iran and establish a joint venture for assembly of its knocked down units of petrol cars.

If the talks materialise then the Khodro company of Iran will import and assemble the units by adding local components like batteries and tyres.

The joint venture will assemble knocked down units of petrol cars, including the latest Tiago, Zest and Bolt, which are run through Tata Motors’s new Revotron petrol engines.

Khodro’s sales network will be used by Tata for the trade.

The branding of the two companies will be of contract manufacturer only. Tata Motors, a subsidiary of Tata Group, aims to start an assembly line in Iran in less than 2 years.

Initially, the company is looking forward for the assembly of 1 lakh cars.  However, the numbers will increase in the future. The production work in the factories, located at Masad and Tehran, are likely to commence by 2018.

Earlier in 2016, Khodro renewed its partnership with French automaker PSA Peugeot Citroen.

The Iranian Khodro firm, which was established in 1962, started contract manufacturing with Sedan Paykan for British based Rootes in 1966. It manufactured for Peugeot as well as Renault Logan Tondar 90 sedan. Presently, it also manufactures many Chinese models.

Marking a return to Iran after four years, Peugeot, in January 2016, struck a deal with Khodro to begin a joint venture which will manufacture three new models.

The Khodro company is 14% owned by Iranian government.

The Dollar Business Bureau - May 23, 2016 12:00 IST