Chery sets up joint venture with local partners in Iran

Chery automobile Corp has signed a joint venture agreement with Iran’s biggest automaker Khodro and Canadian auto parts designer Solitac to set up an assembly line in Iran last Saturday.

Chery holds 30 percent stakes in the joint venture, while Iran Khodro holds 49 percent and Solitac 21 percent, according to the agreement.

The $379 million joint venture, which is based in northern Iranian city of Babol will produce QQ6, a car models developed by Chery Automobile.

The joint venture, which has an annual output capacity of 200,000 cars, will start operations in May 2008, according to Chery Automobile.

The cars to be assembled in Iran will be sold in Iranian domestic markets and exported to other countries. The first QQ6 car model is expected to be released in early 2008.
“The cooperation with Iran Khodro will help promote Chery’s competitiveness in Iran and Middle East regions,” said Yi Tongyao, general manager of Chery Automobile.

The venture will target the Iranian and the Middle East markets. In China, 1.1- and 1.3-liter QQ6 retails for between 39,700 yuan ($5,240) and 50,100 yuan ($6,615), according to a China Daily report.

The export of China-made vehicles has grown rapidly in recent years, mainly because of Chery and other brands such as Geely and Brilliance. Exports in the first half year jumped 71.3 percent to 241,200 units, China Daily said.