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Iran’s Khodro picks Turkey over Bulgaria

Iran’s leading car maker Khodro has decided against establishing production facilities in Bulgaria heeding the advice of its Turkish distributor, MYS Holding.

Planning to introduce its Samand brand automobiles to Europe, the Iran Khodro Industrial Group (IKCO) started the necessary studies to establish a manufacturing plant in Turkey, where almost all major global auto producers have facilities. IKCO General Manager Manoucher Manteghi said Turkey is also among the company’s primary targets for selling its vehicles. “Turkey is both a neighbor of Iran and a European country. We are still at the beginning of our plan, but we are eager to improve our business in Turkey,” he said.

Manteghi was speaking at a press conference in Tehran with MYS Holding Chairman Şükrü Seskır and MYS General Manager Yiğit Seskır to a group of Turkish reporters who had come to visit IKCO’s manufacturing facilities in Iran. Manteghi stated that they had planned to send 3,000 vehicles to Turkey in the first phase but that they had to increase the number to 10,000 to meet demand. However, only 1,000 Samand cars have been sold so far since the dealership network was opened in January of 2008. The network has 16 dealers and 35 service stations in Turkey.

Seskır gave more detailed information on Samand’s targets in the domestic market. He said they had put the brand in the middle of the market with prices that are affordable for middle-class customers.

Seskır talked about their efforts to persuade the Iranians to shift their investment decisions to Turkey. “We told them that the supply industry, which is at the very core of auto manufacturing, is very good and that it is constantly improving,” he noted, adding, “Sales to Russia, Ukraine and the Balkan countries will be conducted from Turkey.”

Iran Khodro and MYS will together invest an amount between €60 million and €200 million. The Iranian company had first entered the Turkish market for the distribution of their products in 2004, but had difficulties at first in complying with Turkish standards. Now they are looking for an opportunity to produce here.

Iran Khodro currently produces 1.2 million cars and exports half that number. The company’s goal is to produce 2 million cars in Iran in the middle term. Its general manager is well aware of the necessity of having a very strong supply industry for production of this size. “We are planning to make Iran Khodro a global player by 2012 at the latest, thus we need better international relations. We prefer Islamic countries for this, and Turkey and Malaysia have priority,” he said.

Some 12,000 people are employed at IKCO’s car manufacturing facilities, while another 7,000 work in the company’s engine production and commercial vehicle departments. The average monthly wage per person is somewhere between $400 and $450. (todayszaman)