Tata Motors is in talks with a local manufacturer here to set up a joint venture for assembling its petrol cars in Iran as it looks to tap the fast growing market that has just emerged from sanctions.
Tata Motors is talking to Iran Khodro Company for a joint venture to assemble knocked down units of the petrol versions of its models, including the latest compact car Tiago, Bolt and Zest, which are powered by the company’s new Revotron petrol engines, sources said here.
Knocked down version of the cars will be imported and assembled at Iran Khodro’s manufacturing facility after adding local contents like tyres and batteries.
Tata Motors will use Iran Khodro’s sales network to sell the cars.
The branding will be of Tata Motors and Iran Khodro will be just a contract manufacturer, they said, adding that Tata Motors will start assembling in Iran in less than two years.
Initially, Tata Motors is looking at 1 lakh cars a year, which will be gradually ramped up. Production at the factory, which may be located in suburban Tehran and Masad, is slated to begin by 2018.
Iran Khodro had earlier this year renewed its partnership with French manufacturer PSA Peugeot Citroen.
Iran Khodro Company (public joint stock) was founded in August 1962. Starting with contract manufacturing of sedan ‘Paykan’ for British firm Rootes in 1966, it has manufactured for France’s Peugeot as well as the Tondar 90 sedan (Renault Logan). It manufactures several Chinese models now.
Peugeot had earlier this year signed a contract with Iran Khodro to start a joint venture that will make three new models.
Peugeot’s January 2016 deal marks its return to Iran after a four-year absence.
Iran Khodro, which is 14 per cent-owned by the Iranian government, was Peugeot’s former partner before the French company’s decision to shut down its operations in 2012 in the wake of international sanctions.
Before 2012, Peugeot would send parts, which then were assembled in Iranian plants.