Saturday, February 26, 2005

Iran to assemble Mercedes cars in 2005

Channelnewsasia.com: "Iran to assemble Mercedes cars in 2005

TEHRAN : Iranian public sector auto giant Iran Khodro Diesel (IKD) signed a deal with DaimlerChrysler for limited numbers of luxury Mercedes-Benz cars to be assembled in the Islamic republic.

The official news agency IRNA reported that under the deal, IKD will set up a company called Top Khodro to assemble the cars under the supervision of Mercedes-Benz, a division of the German-US auto giant.

Mercedes Benz 200, 250 and 350-E models will begin rolling off the production line later in 2005, with initial annual production limited to 2,500 units but eventually expanding to 5,000.

The head of IKD, Majid Sheikhani, said the cars would "fill the gap of luxury cars in Iran".

The official was quoted as saying that only imported components would be used, with the price of each car ranging from 650 million to 1.3 billion rials (73,000 to 146,000 dollars).

IKD is Iran's top truck producer, and has a long history of producing Benz trucks and buses under licence.

But the signing of the contract, initially scheduled for May 2004, had been delayed -- something the Iranian press had attributed to the impact of US sanctions against the Islamic republic.

Iran's auto market is tightly protected, and foreign companies are confined to striking minority-stake joint-venture deals with local firms or allowing their cars to be assembled here from imported or locally made components.

Iran's domestic car, the Paykan, is to be taken out of production before next March, bringing to an end more than three decades of service. The Paykan is a descendent of the long-defunct British Hillman Hunter, the production line of which was sold to Iran in the late 1960s.

That car is already being eclipsed by more modern models made by France's Peugeot, South Korea's Kia and Japan's Nissan. France's Renault has also set up shop here to build the low-budget L-90, or Logan."