Iran Khodro to launch a new car model both in Iran and China

Shanghai, May 21 (Gasgoo.com) It's rumored that the tie-up between Iran Khodro Industrial Group (IKCO) and Jinhua Youngman Auto may be on the verge of breaking down, but actually the largest Iranian automaker is to launch a new car model here in China and in Iran simultaneously.

"The cooperation between Iran Khodro and Jinhua Youngman is still going well, not ended, not suspended," said S. K. Hojjat, General Manager of Iran Khodro China, adding that chief executives of both sides met last October and decided that a new model code-named X12 will be built in their joint venture and then be launched both in the Chinese and Iranian markets.

"It's designed and developed independently by Iran Khodro," stated Mr. Hojjat. The X12, priced lower than 100,000 yuan ($14,300) for the basic model and a little higher than 100,000 yuan for high-end models, is scheduled to hit the Chinese market in early 2009.

Iran Khodro and the Chinese luxury bus manufacturer Youngman Auto Group signed a cooperation deal in 2006. The two partners invested a total of $60 million for the JV, in which Iran Khodro holds 30 percent shares and Youngman holds the other 70 percent.

The construction of their TaiAn plant in Shandong Province is now almost finished and the manufacturing facilities are going to be established. The two sides initially planed to produce Iran Khodro's own-brand sedan -- Samand, but later "as the joint venture company has to be more feasible," they changed it to X12.

The Samand Siren was showcased at the 2007 Shanghai Auto Show, but received a lukewarm response from the public. The X12 to be produced is said to be slightly similar to Peugeot 206, and aims at 70 percent localization -- to source 70 percent of the components from the Chinese suppliers in the end.

The biggest automotive manufacturer in the Middle East is now looking for OEM suppliers in China; for those highly demanding parts that local suppliers can't make, Iran Khodro will use imports from Iran.

Also there's possibility for the JV to export some components of the car or the CBU (completely built-up) cars into Iran, according to Mr. Hojjat.

IKCO Diesel, the commercial vehicle arm of the group, has already signed a contract with China National Heavy Truck Company (CNHTC), for importing HOWO trucks from China. The two sides are set to renew their contract, but so far "no plans yet to start commercial vehicle production in China".

For more information, please read an exclusive interview with General Manager, Iran Khodro China: Largest Iranian automaker taps the soaring Chinese market further