Auto makers from China and Iran have agreed to set up a joint venture production plant in the east Chinese province Shandong to manufacture the Iranian-designed Samand sedan, state press reported Sept. 4. The Iran Khodro Co. (IKCO) has finalized an agreement with Jinhua Qingnian Automotive Co. to manufacture the automobile in Taian city, the China Economic Daily said. Jinhua Qingnian will hold a 70% stake in the joint venture and the Iranian company will hold the rest.
Annual production of the plant will begin with 30,000 cars, while both sides are hoping to increase production to 120,000 vehicles a year based on sales, it added.
"Taian city has worked to get both sides together, the local government has been very supportive and the banks have given us capital," said S.K. Hodiat, an official in charge of IKCO's investment projects.
French automaker Peugeot, which already has existing joint projects with IKCO, will continue to provide parts for the China-made model.
Auto production and sales in China have boomed in recent years with over 3.53 million vehicles sold in the six months to June, up 26.7% year-on-year, the China Association of Automobile Manufacturers reported in July. Production was up 28.9% to 3.6 million units, of which 1.89 million units were passenger cars.
Copyright Agence France-Presse, 2006