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Iran sets rules for joint ventures with US carmakers

Source: Press TV

Iran says there is no obstacle for investment of US companies in its auto sector, but they should respect certain rules.

Condition of Iran's Auto Manufacturing Industry
(cartoon by Shargh)

A top Iranian official said on Sunday the country is interested in the prospects for domestic carmakers to form joint ventures (JVs) with their American companies in the Iranian auto market "provided that they accept seven key preconditions".

Mohsen Salehi-Niya, a deputy industries minister, told reporters that there is no obstacle for US companies to form partnerships with Iranian automakers.

However, he said, this needs to be carried out through a set of policies that the Ministry of Industries, Mines and Trade determines.

"In this partnership, there should be 7 preconditions," Salehi-Niya was quoted as saying by Mehr news agency. "They are mutual cooperation, creation and expansion of industrial units, investments, creation of platforms and developing them, promoting [Iran's] domestic industries and using the capabilities of domestic parts producers".

The official further emphasized that the preconditions apply to any form of partnership between Iranian and foreign auto companies.

Earlier, Mohammad Reza Najafi-Manesh, a member of Iran's Car Manufacturing Policymaking Council, had told reporters that US car manufacturers are waiting for the lifting of sanctions on Iran in order to win a toehold in Iran's auto market.

"Talks have already been held [US automakers' presence in Iran], but details should be announced at a more appropriate time," said Najafi-Manesh.

The automobile industry is seen as Iran's biggest non-oil sector. It accounts for nearly 10 percent of the country's gross domestic product (GDP).

Latest data shows that Iran ranks 18th on the list of the world's top auto manufacturers.

Iran Khodro and Saipa companies account for more than 90 percent of the total Iran imported 102,000 cars during last Persian calendar year (ended March 20, 2015,) showing a 31% year-on-year increase.

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