Financial Tribune- Iran Khodro, a local car producer which assembles a range of different vehicles, has started a new Peugeot Pars production line in western Kermanshah Province.

The factory in the city of Sahneh has created employment for 200 local people, Mehdi Maleki, CEO of the IKCO Kermanshah, told local automotive website ‘Asbe Bokhar’.

Maleki also noted that production at the plant would hopefully reach 15,000 units, to meet demand in Iran’s western regions including Kurdistan and Kermanshah.

He said 570 billion rials ($15.2 million) has been invested in the production line and “79% of the investment has been made by Ministry of Industries, Mining and Trade, with the rest by IKCO.”

Maleki also said, “By the end of the current Iranian year in March 2018, the factory’s daily production rate and the number of employed workers will double.”

Moreover, the production line can be modified to produce other cars in the future, “but the decision is IKCO’s to make.”

 Funding Issues

He also said that initially the Social Security Organization (SSO) was planning to fund the production plant, but later backed out.

Maleki did not give the reason for the SSO pulling out of the deal, but it is said other investments of the government firm, like mobile operator RighTel, have so far raked up millions of dollars of debt, according to people close to that deal.

No official with SSO was available for comment when this article went to print.

 IKCO’s Quality Rating Issues

IKCO’s face-lifted version of Peugeot 405, branded as Peugeot Pars has been produced by the company across several plants for over a decade, and it remains one of the most popular cars in the country despite its ageing looks.

The model is one of the IKCO products marked by low quality and its continued production has been criticized by head of Iran’s Standard and Quality Inspection Company (ISQI), Nayereh Piroozbakht.

The model which has several technical flaws has never been able to earn more than one star in ISQI’s five-star ranking system.

The news of the Kermanshah plant’s opening comes as the outgoing Rouhani government invested 170 billion rials ($4.5 million) in a subsidiary of Iran Khodro in the northern Mazandaran Province, according to the head of the production plant, as reported in the Tribune on May 2.

The CEO of IKCO Mazandaran, Omid Hosseininejad, had said the government wants to modernize the production plant.

New production plants will be launched before the end of the current fiscal (started March 21). “The investment will boost IKCO Mazandaran’s output,” he said without elaboration at the time.