Tata Motors is reportedly in talks with Iran’s Khodro Company regarding a possible joint venture to assemble its cars locally from knocked down kits. India’s largest automaker is looking to be one of the early movers into the Iranian market which has been relieved from the international trade sanctions recently.
Economic Times reports that, if the deal attains fruition, the cars will retain Tata branding since Khodro will act as a contract manufacturer. The local partner will also be responsible for retailing the cars through its sales network.
It’s being reported that the cars will have local contents in the form of tyres, batteries, etc., and Tata Motors is gunning to commence the operations in less than two years. The factory which is likely to come up in the suburbs of Tehran would be ready in 2018 if things progress as per plans.
Khodro Company in which the Iranian government has a stake of 14% has been assembling cars under contract for several years. The company used to be Peugeot’s local partner before the French brand pulled out in 2012 following the sanctions. Peugeot has again entered into an agreement with Khodro now to assemble three models in Iran. The firm has also been assembling cars for various Chinese brands.
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ET reports that Tata Motors is planning to have a production capacity of 1 lakh units per annum in Iran. The high production target indicates that the automaker is betting big on the market’s potential.