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Iran Signs $450M Deal to Export Cars to Russia

By Nigar Bayramli February 23, 2023

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Saipa, Iran’s second-largest carmaker, has secured a contract worth $450 million to export 45,000 cars to Russia. / Trend News Agency

Saipa, Iran’s second-largest carmaker, has secured a contract worth $450 million to export 45,000 cars to Russia. 

According to the Mehr news agency, on February 22, Saipa's CEO Mohammad Ali Teymouri and a group of Russian businessmen signed a contract in a ceremony held in Tehran. The vehicles are set to be transported in several shipments.

As per Teymouri's statement, Iranian and Russian car manufacturers are considering joint manufacturing projects in Iran, and such initiatives will likely result in a substantial rise in exports of cars and automobile components from Iran to Russia.

The signing of the $450 million contract between Saipa and Russian businessmen in Tehran comes about six months after Iranian car manufacturers participated in the MIMS Automobility Moscow 2022 event. During the event, the Iranian carmakers had initial negotiations with Russian trade partners, resulting in a preliminary agreement for the export of cars to Russia.

According to Alireza Peymanpak, the head of Iran’s Trade Promotion Organization (TPO), the value of the Russian car market is approximately $20 billion. The withdrawal of other car companies from Russia, in response to the imposition of Western sanctions, has opened up opportunities for Iranian carmakers to secure a substantial portion of this market, providing them with a competitive advantage, he added.

Peymanpak further said the sale was “a first step towards the presence of our carmakers in Russia, towards joint production and towards the production of new models jointly developed in cooperation with large Russian carmakers.”

Ali Teymouri, the CEO of Saipa, has stated that technical teams from the company will be dispatched to Russia to aid in the restarting of production at two car factories that ceased operations due to sanctions.

In August 2022, Mehdi Khatibi, the chief of Iran’s leading automaker Iran Khodro (IKCO), announced that his company was seeking to sell more cars to Russia when both countries are struggling with West-imposed sanctions. Khatibi stated that within the next two years, Russia is expected to become Iran Khodro's primary market. Additionally, he mentioned that the company is planning to export its Tara cars to Russia in the near future.

Russian car manufacturers faced many restrictions due to tough sanctions imposed by European countries and the US following Russia’s invasion of Ukraine. 

“Under such conditions, Iranian car manufacturers managed to use this opportunity and gain a share of this large market by exporting their products to Russia,” Iran’s Gadget News website said in a report.