IKCO Short-Term Strategy

According to local automotive websites and IKCO statements, among the agendas of the country’s largest auto manufacturer for the current year are increasing the production of certain vehicles and upgrading others as a way of repackaging the older models without having to fully design new cars.

IKCO might be threatened by its nemesis fast closing in. According to projections based on the two companies’ current gross rates, SAIPA will trump IKCO in less than a decade.

According to the latest figures released by the Ministry of Industries with a total output of 653,703 units, during the 11 months of the last fiscal which ended in March, IKCO’s year-on-year production rate growth stands at 9.7%. This is while SAIPA churned out 601,207 units recording a 16.1% YoY growth.

To secure its longstanding foothold in Iran’s market, IKCO has to raise its game or will be replaced by SAIPA as the largest manufacturer in Iran’s auto industry.

The first solution IKCO has arrived at is to raise the production of vehicles they jointly manufacture with Peugeot. The second measure is to upgrade certain models to hype its products and entice customers.

 Boosting Foreign Ties

IKCO and PSA Group’s Peugeot brand signed a €400-million deal in June 2016 creating a 50-50 joint venture they call Iran Khodro Automobiles Peugeot (IKAP).

Officials with the joint venture have announced plans to ramp up production of Peugeot 2008 and Peugeot 301 in the coming months. Peugeot 2008 is the fruit of IKCO’s first joint product with the French company and Peugeot 301 is the second.

The trial production of Peugeot 301 has begun. According to IKCO, the vehicle will reach the goal of being 50% locally manufactured over time.

IKAP has manufactured 1,971 Peugeot 2008 in the 11 months to Feb. 19 and the vehicle is priced at 1.3 billion rials ($31,190). Peugeot 301 is priced at one billion rials ($23,809).

 Refinements

IKCO is set to upgrade and facelift its Samand model, the company’s first locally designed vehicle along with Samand Soren Turbo, Runna and Dena+.

They will add options to Dena+ and utilize a transmission system produced by Belgian firm Punch Powertrain. 

News has broken about the upgraded version of Runna but details of the refinement for Samand and Samand Soren Turbo are not yet available.

The country’s largest auto manufacturer will soon offer a facelifted version of Runna in the auto market.

The industrial group has not made any technical changes to the car and the modification is limited to the vehicle’s appearance and equipment.

The door handles are now the same color as the body of the car, the design of the taillights and headlamps have undergone a major change, and the car’s new steering wheel supports cruise control system.

The upgraded Runna has the same 108 horsepower 1.6-liter engine, 5-speed automatic transmission as its predecessor.

IKCO is yet to announce the price of the facelifted vehicle. Currently, the model changes hands for 367 million rials ($ 8,748).

In the eleven months to Feb 19, IKCO produced 162,416 Samand vehicles, up 73% compared to the same period the year before. 

Dena+’s older brother Dena’s production number stands at 37,470, a 48% YoY increase, and Runna has tumbled to merely 6,249 units, 48.9% down from the previous year. 

Dena+’s current price in the market is 630 million rials ($15,000), Samand Soren Turbo is sold for 440 million rials ($10,476) and Samand LX can be purchased with 344 million rials ($8,190).