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Azerbaijan, Iran to launch joint production of cars

8 August 2016 15:11 (UTC+04:00)
Azerbaijan, Iran to launch joint production of cars

By Nigar Abbasova

Car-makers of Azerbaijan and Iran have decided to launch joint production of cars.

The plant will be located at the territory of Neftchala Industrial district. The project is implemented by Azerbaijani company AzEurocCar and Iranian manufacturer Khodro cars.

Groundbreaking ceremony of the joint Azerbaijani-Iranian plant on the manufacture of cars took place with the participation of Azerbaijan Economy Minister Shahin Mustafayev and Iran’s Minister of Trade and Industry Mohammed Reza Nematzadeh.

Development of non-oil sector of economy in Azerbaijan remains one of the most important issues for the country.

Recent MoU signed between Azerbaijan and Iran, which envisages launch of the joint production of cars in the Neftchala region in the south of Azerbaijan is also considered to be a step forward development of industrial sphere in the country.

The overall cost of the project amounts to $15 million. Some 25 percent of the cost will be provided by Iran while the rest 75 percent to be invested by private companies of Azerbaijan. The plant is expected to cover an area of 10 hectares. Some 20 percent of vehicles is expected to be exported abroad. All vehicles will correspond to the Euro-5 standard, which is considered to be the ecologically cleanest gasoline that is environmentally friendly.

AzEuroCar LLC and Iran Khodro also signed six documents covering licensing, distribution, installation of equipment, engineering and technical support, and other issues necessary for car production.

The project will also allow creating some 300 new work places at the initial stage while the staff is expected to grow up to 500 employees at the second stage of the project. Construction of the plant is scheduled for two years and the plant is expected to be operational in 2018.

With the capacity of 10,000 cars per year, the plant will be engaged in the production of such vehicle brands as Dena, Rana, Soren and Samand.

The total volume of investments which will be allocated for the Neftchala industrial district in the first stage is expected to exceed the level of 20 million manats ($13.3 million). The district has a huge importance from the point of view of the small and medium entrepreneurship.

Energy-rich Azerbaijan, which has recently faced with the negative influences of the global economic crisis and double devaluation of the national currency (the manat) is currently taking bids to develop non-oil sector of the economy and diminish the side-effects of low oil prices. The country seeks to further boost the sphere and create industrial parks and districts in other cities of the country, as they are considered to be an important element of modern and innovative economy. One of the advantages of industrial districts is that entrepreneurs are provided with appropriate and modern infrastructure as well as favorable conditions.

Currently, some 450 companies with Iranian capital operate in the country. Trade turnover between the two countries increased by 66 percent in the first half of 2016 as compared to January-June 2015.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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