Kerman Motor's official request to purchase Saipa shares

Khodrocar - Following the transfer of Iran Khodro to a private sector consortium, the CEO of Kerman Motor has officially addressed a letter to the President, expressing the company’s readiness to manage SAIPA. He has also requested the issuance of necessary directives to expedite this process.

According to Asbe Bokhar News Agency, Kerman Motor, which currently holds a 9% stake in SAIPA, has pursued extensive development plans in recent years. These include platform expansion, production capacity growth, and market share enhancement, all aimed at long-term industry development.

In this regard, the CEO of Kerman Motor, in a letter to President Masoud Pezeshkian, highlighted the company’s strategic goals outlined in the Seventh Development Plan. He also emphasized the Supreme Leader’s and the government’s focus on leveraging private sector capacities. He stated:

"Our company aims to produce 500,000 vehicles, focusing on hybrid powertrains to reduce fuel consumption across the fleet. Additionally, we seek to achieve a localization rate of over 50%. This initiative aligns with the country’s economic growth objectives in the automotive supply chain and aims to reduce foreign currency outflows. To achieve these goals, an investment of over $500 million is required for production capacity expansion, technological advancement, and product development.

To prevent capital outflow and redundant production capacities, we have decided to allocate available resources toward product and technology development. In line with this strategy, Kerman Motor is prepared to acquire SAIPA’s shares through its subsidiary companies, utilizing the funds generated from this acquisition for product, technology, and supply chain expansion.

Currently holding over 9% of SAIPA’s shares, Kerman Motor is ready to participate in the stock exchange auction to acquire shares in SAIPA Investment and Rena Investment from the parent company. This move will not only fulfill the mandates of the Seventh Development Plan regarding the divestment of cross-holdings and corporate governance regulations set by the Securities and Exchange Organization but also ensure that the funds from this transaction are reinvested in SAIPA for technological advancements and the production of higher-quality vehicles.

Kerman Motor’s eligibility to manage SAIPA is well-founded, given its three-decade history in the automotive industry, its progress in localization and product development, and its structured plans for overcoming financial losses and boosting production. The synergy between the two companies' resources could lead to the establishment of a robust automotive group with an annual production capacity of over one million vehicles. This group would integrate various production stages, including press shops, engine and gearbox manufacturing, body welding, painting, and assembly.

Our production growth plans, financial recovery strategies, and product development initiatives have been submitted to the Ministry of Industry, the Industrial Development & Renovation Organization of Iran (IDRO), and other relevant authorities.

Therefore, in pursuit of the Seventh Development Plan’s objectives and to prevent redundant investments and resource wastage, we kindly request the issuance of directives to accelerate the transfer process."

Under these circumstances, if the management and ownership of SAIPA are transferred to Kerman Motor, the combined infrastructure of both companies could, for the first time in years, introduce real competition and independent automotive manufacturing to the domestic market, ultimately benefiting the industry, the market, and consumers alike.