AvtoVAZ Eyes Localization Project in Iran to Expand Lada Brand

AvtoVAZ, Russia’s largest car manufacturer, plans to localize its operations in Iran by assembling its latest Lada model. CEO Maxim Sokolov emphasizes the strategic advantages and partnerships to facilitate this move amid previous sanctions. The company aims to expand exports to Iran and other countries by 2025, reflecting growing cooperation between Russian and Iranian automotive sectors.

AvtoVAZ, Russia’s premier automobile manufacturer, is setting its sights on launching a localization project in Iran, where it aims to assemble the latest Lada model. On Tuesday, CEO Maxim Sokolov stated that establishing assembly lines and dealerships in Iran would confer a “certain competitive advantage” to the company. The localization endeavor reflects a strategic move to penetrate the Iranian market more effectively.

During the announcement, Sokolov expressed confidence, sharing, “… we are betting heavily on the Iranian direction and expect that our dealership will open there soon,” as reported by the official news agency Tass. Furthermore, he indicated that a business partner in Iran, whose identity remains undisclosed, has requested the full Lada product line including the newly launched Iskra model.

Sokolov described the Iskra as being “one step ahead” of most vehicles currently manufactured in Iran, suggesting it might appeal to local consumers. The company is planning to boost Lada exports in 2025, specifically targeting markets such as Iran, Kazakhstan, and Vietnam, according to statements from AvtoVAZ officials.

The affinity Iranians have for Lada vehicles dates back to the 1970s, when the older models gained a reputation for safety and reliability. However, AvtoVAZ’s move into Iran faced previous challenges largely due to US sanctions against Iran, which complicated market entry for many companies.

Despite these hurdles, the partnership between Iranian and Russian automotive companies has strengthened over recent years, easing the process for Russian vehicles to gain a foothold in Iran. Since the beginning of 2022, the landscape has changed dramatically after international car manufacturers like Renault exited Russia due to sanctions related to the Ukraine conflict.

In addition, Iran’s two dominant car manufacturers, IKCO and Saipa, are actively pursuing contracts for exports of vehicles and components to Russia. There are also reports of joint manufacturing projects planned by automakers from both countries, indicating a growing bilateral relationship in the automotive sector.

In summary, AvtoVAZ’s initiative to set up operations in Iran signifies an ambitious move to enhance its presence in the automotive market amidst prior sanctions challenges. The company is banking on the historical popularity of the Lada brand in Iran, coupled with new models like the Iskra, to carve out a competitive niche. The burgeoning collaboration between Iranian and Russian automotive firms further boosts this effort, promising a stronger future for both sides.

Original Source: www.presstv.ir