There’s no shortage of news coming out of Iran at the moment. As previously noted, whilst DaimlerChrysler’s feet seem to be cooling down, Volvo – through its deal with Saipa Diesel – is pushing locally built trucks into both the Middle East and Africa, in a 2000 truck deal valued at €130 million.
Now comes the news that Russian automaker GAZ – LDV’s new owner – has signed a $250m deal with Iran Khodro Diesel, which will see the establishment of an Iranian production facility for a new version of the Gazelle van.
We don’t know whether or not this new Gazelle will bear any resemblance or not to an existing LDV product, but we do know that, under the terms of the agreement, IKD will take 12000 CBU vehicles initially, but will then move towards CKD production, with a domestic component content of around 50 per cent within the first year.
Iran and Russia are becoming increasingly close through their respective automotive sectors. Iran has already sold over has sold 5,000 Samand cars – produced by Iran Khodro Diesel’s parent company – IKCO - to Russia. A Samand production assembly line is now open in Belarus and IKCO is believed to be targeting Eastern Europe as a potential export market.
Coming from Russia is an increasing amount of heavy truck expertise. Kamaz – due to float on the LSE in 2008 - has signed an agreement with Iran, worth over $400 million based on which 1,500 heavy trucks will be built through a licencing deal with Rakhsh-Khodro Diesel Co. With a base price of $70,000, some 1500 units will be produced initially, with a maximum planned output of 5000 units per year when capacity is fully ramped up.
But Iran is also eyeing up export markets. According to this report from the Iranian Fars News Agency Iran Khodro Diesel is due to begin manufacturing both truck and bus products in Senegal and Sudan.
Speaking to FNA, Managing Director of Iran Khodro Diesel Majid Sheikhani is reported to have said that the assembly lines in the two African countries constitute a measure aimed at securing extensive presence of his company in the world market.
The report says that Iran-Khodro has decided to manufacture various types of heavy vehicles, including trucks and buses, in Senegal and Sudan for domestic consumption only. He also said that his company intends to start an assembly line in Ethiopia in the near future.
Sheikhani's view is that Africa and the Middle East are key markets for IKD, and that he expects to export $40 million worth of products during the next year.
This is further evidence – if any further was needed – that the established European OEMs are lining up to get a serious poke in the eye.
Deals between China and Iran – China National and Iran Khodro – Russia and Iran – GAZ, Kamaz et al – and Russia and China – take a look at what IRITO is doing with FAW trucks – all add up to the possibility of European OEMs being squeezed out of the emerging markets. Factor in the Indians – Ashok Leyland and Tata are both eyeing up the African markets – and the inevitable conclusion is one that points towards a leveling of the global playing field. Can the Triad-based technologically driven OEMs compete in a market in which cost rather than brand is everything? We shall wait and see.