TEHRAN, Young Journalists Club (YJC) - The Tehran-based automaker has mostly been producing budget cars in recent years under license from South Korea and France for Iranian and international customers.
The company exports vehicles to about 40 markets, deputy head for exports and international affairs of the group Mohsen Dastkhosh said on Friday.
“Saipa Group's new plans for designing and producing a competitive product will bring about a boost in exports,” IRNA quoted him as saying.
Saipa began production in Iran in 1968 by assembling French automobile manufacturer Citroen’s Dyane which went under the name of Jyane in the Middle Eastern country.
Since then, the group has been expanding and currently includes such subsidiaries as Saipa Diesel, Pars Khodro and Zamyad Co.
Iran’s auto industry is the Middle East’s largest but it is based on assembling foreign brands. Iranian automakers now design, manufacture, and export cars. They also manufacture automotive parts and components and sell their products through dealers in Iran and internationally.
The industry has the full state support and a monopoly on the market which, many critics say, has resulted in a laggard sector with no serious efforts to improve quality despite frequent price hikes. It includes levying hefty customs duties on imports in order to protect the domestic auto industry.
Iranian automakers see total production to hit 1.6 million units in 2017, up from 1.35 million last year and 750,000 in 2014 when the country came under intensified sanctions.
Since the lifting of the sanctions in 2016, the auto sector has drawn perhaps the biggest interest from foreign investors, chiefly the French, who are looking to tap the country’s hunger for new cars.
France's Peugeot Citroen and Renault slammed the door on Iran’s face after Europe intensified sanctions on the Islamic Republic in 2011. Many experts are now advising caution and call for stronger checks and balances in dealing with the French.
Iran is the Middle East’s largest auto market with a population of more than 80 million who are estimated to buy more than 1 million cars in 2017.
The automobile industry is seen as Iran’s biggest non-oil sector, accounting for nearly 10% of the country’s gross domestic product (GDP). Iran Khodro and Saipa companies account for more than 90 percent of the total domestic production in Iran.
Officials say the country has the capacity to turn into a hub for production of vehicles in the regional market with a population of 400 million people.