Venezuelan-Iranian Car Company Releases First Models

Mérida, July 10, 2007 (venezuelanalysis.com)— As a product of economic agreements between Venezuela and Iran, the joint car company Venirauto released its first 300 units at an event in Caracas yesterday. The factory, located west of Caracas in Maracay, will produce some 25,000 cars per year using Iranian technology. The two countries are also making tractors and farm equipment for the Venezuelan market with the intention of eventually transferring 100 percent of the production to Venezuela.

Defense Minister Raul Isaias Baduel, together with Iranian Ambassador Abdolah Zifan, handed over the first 227 vehicles to recent graduates of the Military Academy in the Caracas military base Fuerte Tiuna. These vehicles were among the first to be assembled in the Venirauto factory that was inaugurated last November.

"This accomplishment is a tangible example of what cooperation between brother nations, like Venezuela and Iran, can achieve," said Minister Baduel at the event yesterday.

The company Venirauto, which is 51% Iranian and 49% Venezuelan, is producing two different models. The first model, the Turpial at a price of Bs. 17 million (US$7,906), is a 4-door sedan based on the old Kia Pride model. The second is the Centauro, at a price of Bs. 23 million (US$11,069), and is based on the Peugeot 405 given that the French firm is the main supplier of engines and technology to the Iranian company. Both models are exempt from Venezuela’s sales tax IVA (Value-added tax), due to a government program to subsidize cars that include Venezuelan production.

The goal is to eventually produce 100% of the cars in Venezuela. According to the director of Venirauto, Abdollah Zoghi, the cars will be made of 35% Venezuelan production in the next 3 years and this will eventually get to 92% within the next five years. Also on the agenda is to design another model that will be 100 percent national production.

This year the company will produce 8,000 total units to be sold in the central region of the country and by 2010 there will be around 25,000 units produced annually. The cars are completely compatible with the lubricants and fuels used in Venezuela, but by 2008 the company also plans on building natural gas powered vehicles. Also, by the end of 2007 they have planned to produce a pick-up at lower prices than current market prices.

For the Iranian ambassador Abdolah Zifan, this all represents "an answer to the negative campaigns against us…We hope the production of this factory gets out to the whole nation and we hope to see the completion of other projects between the two countries."

In another joint project between Iran and Venezuela, the two countries are also producing about 20 tractors daily, according to the director of the joint company Veniran Tractor, Noel Zakur. The joint company Veniran opened just over 2 years ago and hopes to be producing tractors with 70% Venezuelan production in the next 3 years. Currently, Venezuelan production makes up only 18% of the Iranian tractors. By 2010 the goal is to produce 100% of the tractor inside Venezuela.

Zakur mentioned that the company is also producing farm implements and agricultural equipment such as plows and that the company is looking to export to other countries as well.

According to Zakur, the company recently exported 75 tractors to Bolivia, and will be sending to Nicaragua 150 more tractors, along with implements this month. Also being analyzed is the possibility to export to other countries in Latin America such as Argentina, Uruguay, and Chile.

The increased economic relations between Iran and Venezuela are producing a number of other joint ventures, including joint petrochemical plants and the production of construction materials and housing. The director of Venirauto stressed the success of these joint projects yesterday.

"We can say that we are winning because our trains are on the tracks, our tractors are in the countryside, and our cars are driving through the streets," he said.