The shares of domestic car manufacturers are given to the Chinese

The idea of ​​handing over the shares of domestic car manufacturers to Chinese and foreign companies was proposed in previous years, and now the possibility of this idea being implemented has become stronger.

Process Transfer of equities The two major car manufacturing companies in Iran, Pars Khodro and Saipa-Citroen, are working in stages according to government orders. According to the latest automobile news, it seems that Chinese companies are also among the main applicants for buying the shares of domestic automobile manufacturers.

Chinese automakers are stepping up to buy shares of domestic automakers

According to the privatization process, assignment of mass shares and transfer of subsidiaries are on the agenda. During this process, Saipa Automotive Group has taken the initiative to transfer Pars Khodro and Saipa-Citroen companies. According to sources, Changan China Company has submitted its offer as one of the main applicants for the purchase of Pars Khodro shares. It is also reported that Dongfeng is also considering to buy Saipa-Citroen company shares Is. This information shows that Chinese companies, especially Changan and Dongfeng, are looking to strengthen their presence in the Iranian car market. On the other hand, the past cooperation between Saipa and Changan shows the important role these companies have played in the development of the automobile industry in Iran.

On the other hand, Dongfeng Company, a business partner of Iran Khodro, is among the companies that are looking to buy the shares of Saipa-Citroen in Iran. Cooperation between Dongfeng and Saipa is not new and goes back to the sanctions era and before. When Saipa Diesel was banned from cooperating with Volvo Trucks due to sanctions, Dongfeng successfully started cooperation with Saipa Diesel. Currently, Dongfeng has a cooperation and joint production contract with Iran Khodro.

Reports show that during the recent trip of Minister Samet to China and visiting automobile factories, the strategic cooperation memorandums between Iran Khodro Industrial Group and Dongfeng Company were signed by the CEOs of these two companies. These cooperations show the development and strengthening of relations between Dongfeng and Iran Khodro Industrial Group in order to produce joint products. Not long ago, during the visit of the Minister of Peace to China's Dongfeng Company, a contract to import electric taxis was signed between this company and Iran Khodro Industrial Group in order to modernize the country's public transport fleet, and it seems that this agreement is in the implementation stages.

Although Dongfeng has a bilateral cooperation agreement with Iran Khodro, it is rumored that this Chinese company intends to have a greater presence in the Iranian automobile market, and for this reason, it has taken steps to buy the shares of Saipa-Citroen.

Challenges of privatization of automobile manufacturers

Regarding the transfer of shares of car manufacturers to Chinese companies, this issue has always been discussed in the last decade. So far, command pricing and identifying the right buyer have been one of the main challenges of this process. It is the responsibility of the company's board of directors to announce the pricing path of the cars, and there is also the possibility of assigning Todli shares. However, the equity buyer has always been an unknown point in this equation.

The main reason for not handing over the state shares of automobile manufacturers to the private sector is related to the difficulty in determining the assignment of the shares of the manufacturers. The government has about 6% of shares in Iran Khodro, but about 17% of the shares are owned by government-affiliated companies and banks. On the other hand, about 25% has been purchased by the Iran Khodro subsidiary; Therefore, it can be said that more than 40% of Iran Khodro's shares belong directly and indirectly to the government!

Along with Chinese companies, parts makers are also proposed as potential options for buying shares of car makers. However, it should be noted that this may increase the monopoly in the automobile industry. In any case, the issue of buying shares of automobile companies in Iran has become a serious issue. If this scenario comes to fruition, component manufacturers will play a role in this process as both sellers and buyers.

As it was said, this creates a double monopoly in the troubled Iranian car market. In the following, this monopoly leads to the government's dissatisfaction with handing over shares to component manufacturers. Many experts and people involved in the automobile industry believe that handing over shares to foreign automakers can help the growth and promotion of the country's automobile industry and make the market more competitive. This model has worked in many countries and has made even bankrupt car manufacturers profitable.

Previously, during the nuclear agreement (JCPOA), the offer to buy Pars Khodro shares was proposed by Renault. But the negotiations between Renault and Pars Khodro did not go anywhere due to opposition and internal problems. Nasser Aghamohammadi, the then CEO of Pars Khodro, said in 1994 that Renault wanted to buy half of Pars Khodro's shares.
These statements show that the managers of Renault have been waiting for a long time for the international sanctions to be lifted from Iran so that they can invest more in Pars Khodro. Since it is currently not possible to sell the shares of Pars Khodro to European companies, it seems that the possibility of selling the shares of Pars Khodro and other domestic car manufacturers to Chinese companies is higher than ever.