Russia's AvtoVAZ to Begin Exporting Lada Cars to Iran

Russian carmaker AvtoVAZ is set to return to the Iranian market after a 25-year hiatus, according to the company’s president Maxim Sokolov.

Russia’s war has seen hundreds of foreign companies leave the country, but no sector has been harder hit than the automotive. AvtoVaz, maker of the Lada, has seen its production come to a virtual standstill as the company, formerly run by Renault until its exit following the invasion of Ukraine, set up a “spoke and wheel” model that means most of the more sophisticated parts were imported from Western Europe. Those imports have stopped now and the company has few alternative options to replace them.

The CEO promised the company plans to enter the Iranian market and to sell models locally this year as part of a growing relationship with its Iranian counterpart, SAIPA with the Mark-I Dacia Logan model. Sokolov added that the company will follow its previous plans and does not intend to change selling plans to Iran despite the “worsening situation in the Middle East.” Maxim said:

“We do not change [our plans], because any escalations pass…The infrastructure for sales [in Iran] is already prepared. We will begin deliveries and sales within this year.”

Sokolov didn’t reveal the exact sales volume AvtoVAZ anticipates for the Iranian market, which is primarily dominated by local car companies Iran Khodro Co (IKCO) and Saipa (previously a French joint venture). He added that considering the Iranian market sold over 1 million cars last year, the company sees it as a very promising market for its low-cost vehicles.

Not by coincidence, Saipa and IKCO sold over 1.02 million cars during the last Persian calendar year (March 2023-24). Chinese car companies were the closest foreign brands in the market. However, their market share was minuscule despite complete-knock kits being assembled in the country to reduce the tax burden on companies like Chery.

In December 2023, Sokolov announced that the company is considering selling Lada car models in Iran as CBU, which do not require assembly, as reported by the news portal of the Iran Embassy to Russia in Moscow. The Lada cars were publicly unveiled in Iran during the second Eurasia Expo in December 2023, however, the company has not yet announced the registration and supply timeline for the Russian Lada cars in Iran.

Source: IntelliNews