Iran said on Sunday that a deal has been signed with South Korea’s SK Networks to provide $1 billion in funds for the procurement of auto parts and car production materials.
The deal that has been signed with Iran’s second largest automaker SAIPA envisages providing financial support for purchases of metal sheets, parts for complete knock-down (CKD) production of Cerato cars as well as other necessary spare parts.
SAIPA Director for Commercial Affairs Hassan Baqaei has told the media that proceedings have already started to provide around $250 million within the same scheme for the booked purchases of the company. This, he added, has been carried out over the past few weeks.
Baqaei added that a separate plan is on agenda to form a joint venture with SK Networks. He said talks between the two sides over the same issue are already in final stages.
The official further emphasized that the Korean company is interested in expanding its cooperation with SAIPA in a variety of areas.
SAIPA and SK Networks last month signed a basic agreement to form a joint venture that would focus on providing metal sheets for production of cars, producing cars and making investment in related industrial projects.
SAIPA CEO Mehdi Jamali told the media at the time that the planned venture with SK Networks can help make his company become the representative of Kia Motors in Iran.
Iran is the Middle East’s largest auto market with a population of 80 million. The automobile industry is seen as Iran’s biggest non-oil sector, accounting for nearly 10% of the country’s gross domestic product (GDP).
SAIPA, along with Iran Khodro, dominates Iran’s massive market of about 80 million people. It consists of seven manufacturers and roughly contributes at least 30% to the total car production in Iran at above 300,000 cars per year.
SAIPA is also pursuing ambitious export plans and has already set up plants in several overseas markets including Iraq, Syria and Venezuela. The company is also already working with partnerships with several global brands including Citroen with which a deal is expected to be sealed in the near future.
By Press TV