Financial Daily from THE HINDU group of publications
Thursday, Nov 20, 2003
Financial Daily from THE HINDU group of publications Thursday, Nov 20, 2003 |
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Corporate
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Alliances & Joint Ventures Iran Khodro keen on ties with Tata Motors Our Bureau
Mumbai , Nov. 19 THE scene is hazy and talks, quite preliminary. But Iran Khodro Co, the biggest automobile manufacturer in West Asia, has renewed its interest for an understanding with Tata Motors. Earlier talks between the two parties meandered following changed economic conditions in Iran and shuffle of personnel at its leading car company. "We hope we can make it happen again'', Dr A. Albadvi, Executive Vice-President (Strategy & International Cooperation), Iran Khodro, told Business Line . According to him, besides synergy in car manufacturing, Iran Khodro is keen on co-operating with Tata Motors on the engine front, given the country's "ambitious programme in CNG''. But the proposal comes with conditions — the Iranian company wants to map the market separately for both the players with Tata Motors concentrating on cars for the `A' and `B' segments and Iran Khodroon the `C' and `D' segments. As of now, the Tatas have no presence in the `A' segment but have a strong domestic presence in the compact car or `B' segment through `Indica'. This platform has spawned the `Indigo', which is sold in the domestic `C' segment as an entry-level mid-size car. The Tatas unveiled the `Magna' for the domestic `D' segment some years ago. The project never took off and since Indica's launch, market action was mostly turned towards compact car and mid-size segments. Currently, both the Indica and the Indigo are among the high selling products , the former now slated for exports to the UK as the City Rover. Dr Albadvi confirmed that Iran Khodro has shipped one of its `Samand' mid-size cars to India, for testing by the Tatas. But in the pursuit of greater volumes for manufacturing by pooling their respective markets, it is a relevant question whether priority in the `C' and `D' segments for Iran Khodro would be acceptable to the Tatas. A Tata Motors spokesperson said talks between the two companies are at a preliminary stage. Dr Albadvi said Iran Khodro does not limit its restrictions to Tata Motors as a sole partner for accessing the Indian market. He was on record last week, seeking a Japanese partner for Iran Khodro at home. "Our dream is to partner Toyota,'' a foreign news agency had reported quoting Dr Albadvi. Iran Khodro, with a forecast turnover of $3.8 billion this year, is the biggest automaker in West Asia, wherein the Iranian market having demand in excess of one million units is the largest. Iran's car sales grew at an average of 32 per cent since 1996 and despite supply seen touching seven-lakh units in 2003, about 30 per cent of demand remains unmet. Among foreign brands, Peugeot leads in Iran, followed by Hyundai/KIA. A couple of years ago, Peugeot and Tata Motors had explored the possibility for joint development of a new car. But the project had been subsequently given up.
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