Muscat: An Iran-Oman joint venture to manufacture cars in the Sultanate will start operation after one year, according to a senior official of Iran Khodro Industrial Group.
Saeed Tafazoli, deputy president, export and international affairs at Iran Khodro Industrial Group, said that a joint venture formed to start assembling cars in Duqm will start production of 10,000 cars in the first phase, which will be scaled up to 20,000 units in the second phase.
“A feasibility study is going on now, which will be completed by next month. Based on the findings of the feasibility study (if the project is absolutely feasible), a joint venture company will be established and the project will start construction. We will need 12 months for building assembly unit and creating other facilities for starting production,” Tafazoli told ‘Times of Oman’.
A memorandum of understanding was signed by Iran-based automobile giant, which is the largest automobile manufacturer in the Middle East region, with Oman Investment Fund in January and the joint venture plans to launch Khodro’s Dena brand in Oman.
Apart from selling cars in Oman, the joint venture company plans to export cars to neighbouring regional markets and Africa.
Tafazoli said that the initial investment for the assembly line would be $15 million, which will have a capacity to assemble 10,000 units. “The capacity will go up to 20,000 units per year within two years. The company will also set up a body shop and a paint shop in the second phase and the investment in the second phase will be $30 million,” added Tafazoli.
The Iranian auto firm will support the joint venture with technical know-how, training and will supply equipment for the assembly unit.
Tafazoli also noted that there is a great opportunity for the Sultanate’s private sector to set up units for producing automobile spare parts. “There are many parts which are not economical to import from Iran. Such spare parts can be manufactured in Oman,” he said. This is possible by establishing vendor-to-vendor tie ups with Iranian auto parts suppliers.
Referring to employment potential, Tafazoli said the joint venture automobile company will provide employment opportunity for 130-250 people within the plant, and there will be a requirement of another 50 supporting staff. Also, there are two other areas for employment opportunity — after sales service and spare parts distribution.
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