Iran is to export 45,000 SAIPA vehicles to Belarus in the next three years under a $450mn contract, Iranian Minister of Industry, Mines and Trade Seyyed Reza Fatemi Amin said on March 15.
Three car models will be shipped. One is the Shahin, which is based on a Toyota platform that hosted the older Corolla model. The two others, namely the Kwik hatchback and Tiba sedan model, are built on an Iranian platform.
Second largest Iranian automaker SAIPA is targeting both the Belarusian and Russian auto markets as export opportunities because Western-brand automakers have given up on both their Belarus and Russia operations as part of the economic backlash to the Russian invasion of Ukraine, which was partly enabled by Belarus.
During a visit paid to Tehran earlier this week, Belarusian President Alexander Lukashenko, together with Iranian counterpart Ebrahim Raisi, signed agreements that will resolve permitting difficulties, such as with certification, that stood in the way of the planned export of SAIPA vehicles to Belarus.
Iran has been stating for months that it is ambitious to mop up the bottom end of the Russian and Belarusian car markets following the exodus of European and Japanese brands.
However, SAIPA faces stiff competition from low-cost Chinese imports and Russian carmaker AvtoVAZ, the producer of Lada vehicles. Both offer cars at the same price point.
One drawback for SAIPA is that its cars have never been tested in harsh Russian winter conditions.
SAIPA is already in a deal with AvtoVAZ for the production of the mark-I Dacia Logan. It is being rebranded by both SAIPA and Russia for local production.
SAIPA will arrive on the Russian market with some of its models following the signing of a breakthrough agreement for the export of 45,000 of its vehicles to Russia over the next Persian year (starts March 21), Tejarat Online reported on February 22.
With the conclusion of the export contract—drawn up in line with understandings reached at the 2022 Moscow Automobility Exhibition as Russia and Iran boosted political and a range of economic ties—45,000 vehicles manufactured by SAIPA will be exported to Russia in several shipments. They will have a total value of $450mn.
The deal to export the models was signed with Russia’s BM Group, renowned for its production of Russian military equipment.
The SAIPA Shahin, Kwik and Saina models are included as part of the deal.
SAIPA’s main competitor in Iran, Iranian number one automaker Iran Khodro (IKCO), exported some of its vehicles to the Russian market between 2007 and 2009, but things did not work out. Only a few IKCO cars remain on Russia’s roads. Some buyers of IKCO models complained that Iranian cars could not handle the cold Russian winters. There were also objections to poor-quality parts.
IKCO sold cars in Russia that were based on old Peugeots—for example, the Samand model, which is essentially nothing more than a Peugeot 405 from the 1980s.
By the end of the 2000s, the Samand was seen in Russia as outdated. The country was busy actively developing the production of Western, Korean and Japanese brands that offered more interesting models.