Iranian SAIPA cars in Russia will be sold by two companies. And everyone wants to build a factory. For three years, competitors have pledged to sell a minimum of 45 thousand cars. Why do they need it and what will happen to the prices
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Two companies immediately announced contracts for the distribution of Iranian SAIPA cars in Russia, Autonews.ru found out. Each has pledged to sell at least 45 thousand cars in three years, both plan to organize local assembly and open dealerships. Autonews.ru figured out how SAIPA deliveries and services will be arranged in Russia and Belarus, how much these cars will cost and whether they will be in demand.
Without exclusive rights to Iranian cars
In February 2023, the Belarusian company Lucky Carensi announced the conclusion of an agreement on the distribution of Iranian SAIPA cars in Russia and Belarus. And at the end of March 2023, at a press conference in Moscow, the Russian company Best Auto was already presented as a SAIPA distributor.
As Autonews.ru found out, both statements do not contradict and do not exclude each other. Both companies are distributors, both are working on obtaining OTTS (Vehicle Type Approval) and both are exploring the possibility of local production. At the same time, none of the parties has exclusive rights to SAIPA in Russia and each is ready to cooperate with dealers and supply them with Iranian cars. At the same time, the Best Auto company alone announced its readiness to open 120 brand dealerships with the help of new partners from Russia.
According to agreements with the Iranians, each company must sell 45,000 vehicles in Russia (in the case of Lucky Carensi, in Russia and Belarus) in three years. We are talking regarding 10,000 in 2023, 15,000 in 2024 and 20,000 in 2025, Lucky Carensi told Autonews.ru. Best Auto, in turn, expressed the assumption that the Iranians might revise the terms in favor of one of the companies in a year if it shows better sales results. The declared volumes for Russia are not so large even following the market decline: at the end of 2022, Russians bought 687,370 new cars, excluding parallel imports. At the same time, according to analysts from B1, the annual demand for new cars in Russia will be 1.3-1.5 million units by 2025 and 1.5-1.7 million by 2030.
SAIPA Saina
Who will do OTTS and why is it important
According to the rules of the Customs Union, which includes Russia and Belarus, for official sales of a car in Russia, the manufacturer or its authorized structure must obtain a Vehicle Type Approval – OTTS. For this, costly safety tests, including crash tests, must be carried out. It is important that only one legal entity can receive OTTS, regardless of where it is issued – in Russia, Belarus or other countries of the Customs Union.
Lucky Carensi told Autonews.ru that the company has signed an exclusive agreement with SAIPA to receive OTTS. Tests are planned to be carried out in Belarus. While the company is waiting for technical documentation from Iran, from which it will become clear which tests need to be done in Belarus or Russia, and which have already been carried out in Iran and can be credited in the countries of the Customs Union. This will determine the cost of obtaining OTTS.
At the same time, Best Auto Autonews.ru stated that they were not aware of the exclusive right of Lucky Carensi to represent the interests of SAIPA in obtaining state certification. However, they admitted that they did not see the papers signed by another distributor with the Iranians.
According to Yevgeny Chizhov, director of strategic development at Best Motors, SAIPA has its own legal entity in Russia, and through it the Iranians have already tried to get OTTS on their own, but have encountered some difficulties.
SAIPA Saina
In turn, Best Auto is ready to help in obtaining OTTS through NAMI, but this will require serious expenses, which should be reflected in the terms of further cooperation. The company also expressed its readiness to cooperate with Lucky Carensi if it is the Belarusian structure that receives OTTS.
Best Auto is confident that they will have more chances to develop SAIPA distribution in Russia, while assuming that the Belarusian market will remain with the local distributor. In turn, Lucky Carensi relies on its long-standing contacts with Iranian automakers.
The Lucky Carensi company itself traces its history back to the Auto Friend company, which was the first, back in the middle of the 2000s, to start importing Iranian cars of the Iran Khodro brand into Russia. Now “Lucky Carensi” is also a distributor of Iran Khodro in Belarus. The resumption of sales of cars of this brand in Russia is not planned in the near future. As for Best Auto, this company specialized in repairing truck engines of well-known brands that left Russia, as well as repairing Chinese and Korean-made engines. However, with the departure or freezing of European partners, the company is forced to look for new options for work.
Enough cars for everyone
Sergey Vachinsky, the director of Lucky Carensi LLC, assured that the Iranian SAIPA will be able to produce any required number of cars for Russia. He compared the scale of production with the Togliatti AvtoVAZ.
SAIPA Shahin
The future distributor believes that the capacity of the plant in Tehran will be enough for the domestic market, and for Russia and Belarus. At the same time, they emphasize that Iran has been under sanctions for decades and external factors will no longer be able to disrupt local production. Another important point is the availability of spare parts for repairs.
Production localization plans
Both distributors are not going to stop at the import of Iranian cars alone. At the Best Auto press conference, it was announced that the possibility of organizing the assembly of SAIPA cars at the facilities of one of the idle automobile production facilities in St. Petersburg is now being studied. As it turned out, Lucky Carensi is also preparing for local assembly. But already in Belarus, at the Unison plant, which already has experience in assembling Iranian Iran Khodro machines. Negotiations are already underway, assured both Russian sides. However, they will make a decision following they evaluate how much the Russians liked these cars.
According to Vachinsky, local assembly will reduce the price of Iranian cars.
“We are not yet ready to name exact prices, but we can roughly talk regarding $13,000 for the simplest models up to $22,000 for the SAIPA Sahin sedan. The Unison plant already has benefits that allow it not to pay a recycling fee. Plus, customs clearance of car kits is cheaper than in the case of finished cars. In total, the savings can reach $3,000 per car,” Vachinsky told Autonews.ru.
SAIPA Shahin
It should be noted that the prices given in Lucky Carency ($13,000-22,000) are close to those price guidelines for the cost of the first three models for Russia, which are given in Best Auto. So, according to their estimates, the Saina compact sedan, the Quik hatchback and the flagship Shahin sedan should cost from 1 million to 1.7 million rubles.
Both distributors promise to name the final cost of the cars following the logistics are established and the exact cost of delivering the cars from Iran to Russia becomes clear.
Logistics will be difficult
Iran and Russia do not have a common land border, and this will definitely lead to difficulties for distributors. This is the opinion of businessman Ararat Mardoyan, whose company AvtoDegustator is already transporting cars through Iran to Russia for parallel imports from Europe.
“There are several ways. The first is by ferry across the Caspian Sea. But Iran does not have its own ferries, and the Russian ones are very outdated and have been operating almost since the time of Lend-Lease deliveries of military equipment through Tehran during the Great Patriotic War. In Astrakhan, there is no berth where cars might be rolled out from the deck. Each one needs to be unloaded with a crane, which takes a long time,” Mardoyan shared.
SAIPA Quick
The expert named another way – the land route through Armenia and Georgia. But at the same time he pointed out that the throughput of the customs point in Upper Lars is limited, the car transporter can stand in line for 20 days.
“Azerbaijan will not allow auto transporters to Russia by land because of the complication of relations with Iran. Finally, it is possible to transport it by ship through the Persian Gulf, the Mediterranean and the Black Sea to Novorossiysk,” Mardoyan believes.
According to the expert, if distributors start using all channels simultaneously, then even in this case it will be impossible to supply 20,000 vehicles to Russia in 2023, and a further increase in deliveries is realistic only if Russian ports in the Caspian Sea are modernized.
Business model from the 1990s
In the modern history of the modern Russian automotive market, there have not yet been examples of cars of the same brand and the same model being offered in Russia by two or more distributors. But this was in the 1990s, Oleg Moseev, head of the Automarketologist project, recalls. According to him, then several dealers at once might import the same new foreign cars to Russia and then resell them to smaller dealers, actually doing distribution.
“I don’t think it will work now. SAIPA is a new brand for Russia, it needs . And who will pay for it? If one distributor does this, then the second will take advantage of the success. So, both will save. As a result, end dealers will lose from this, ”says the expert.
SAIPA Quick
What is it all regarding – SAIPA
The name SAIPA itself is not translated from Iranian. Moreover, this is an abbreviation that is not deciphered from Persian, but from French. Initially, the plant was called SAIPAC at all. In Russian, this can be deciphered as “Limited Liability Company for the production of Citroen cars in Iran.”
The plant was founded as an Iranian-French joint venture in 1965. Cooperation with the French auto industry continued following the Islamic Revolution in Iran, but now SAIPA produces cars of its own design, however, using the available technologies of world auto concerns. In recent years, there is more and more Chinese in Iranian cars. The same SAIPA, or rather, its subsidiaries, produce cars from China at their facilities, and the SAIPA Sahin sedan is equipped with an automatic transmission, which is still unavailable for Lada Vesta, made in China.
Sergei Ivanov, Alina Raspopova.