Iran Khodro to enter Chinese auto market next year

Shanghai. September 18 (Gasgoo.com) Iran Khodro Industrial Group, the biggest automaker in Iran, is planning to enter Chinese auto market via cooperation with the Jinhua Young Man Automobile in Zhejiang province, state media Xinhua News Agency reported today.

Hojjat, general manager of Iran Khodro Industrial Group said his company has set up a joint venture in the city of Tai An, Shandong province. The two sides have injected US$60 mln in initial investment. The joint plant is expected to start production by June 2008.

The project, with a projected total investment of US$200 mln, is designed to produce 120,000 vehicles annually. In this joint project, Iran Khodro holds 30 percent stake and Jinhua Young Man Automobile holds the remaining 70 percent, Xinhua News Agencey said.

"The project will be able to produce 30,000 vehicle at the begining, but output capacity will reach 120,000 in three years," Hojjat said. "The first vehicle produced by the joint venture will be Samand sedan or an entirely new model similiar to PSA 206SD."

The joint venture will not produce PSA brand cars, Hojjat stressed. Iran Khodro had a plan to produce PSA 206SD model in China but the plan met strong opposition from its partner PSA.

Apart from the joint venture plan, Iran Khodro also plans to export Samand LX and the latest model of Soren to China. Samand LX has reportedly finished certification process and Soren is in the middle of this process.

"We will start our export plan after the certification work is done," Hojjat said. "The export plan and local production are independent from each other."

"If everything goes smoothly, the first Iran vehicle will be sold in Chinese market next year," Hojjat. "We need to have a lot of dealers to join us."