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Chery Enters Deal to Make Cars in Iran
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Chery Automobile, partner of Chrysler and Fiat in China, will enter into a $370-million joint venture with an Iranian auto company to make cars in the Middle East country.

A statement issued on Friday by the seventh largest Chinese auto group, based in the eastern city of Wuhu, said it would hold 30 percent of the stakes in the venture. Iran Khodro, the biggest carmaker in the oil-rich nation, will own 49 percent, and Canadian auto parts designer Solitac the rest.

The factory to be set up in the northern Iranian city of Babol will start operations nine months later and can assemble up to 200,000 Chery QQ6 micro cars a year, Chery said.

The venture will target the Iranian and the Middle East markets. In China, 1.1- and 1.3-liter QQ6 retails for between 39,700 yuan ($5,240) and 50,100 yuan ($6,615).

The venture is part of Chery's efforts to attain an overall sales target of 1 million cars a year by 2010. This year its target is 400,000-plus units.

Chery agreed in July to make small cars at home for Chrysler for North American and European markets. It also has some plants in Uruguay, Malaysia and Egypt.

Its year-on-year overseas sales almost quadrupled to 52,712 cars in the first half the year, and it aims to ship more than 100,000 cars abroad for the full year, up from 50,000 units in 2006.

The export of China-made vehicles has grown rapidly in recent years, mainly because of Chery and other brands such as Geely and Brilliance. Exports in the first half jumped 71.3 percent to 241,200 units.

Iran Khodro has a brand of its own, Samand, apart from making Peugeot models under a technical licensing deal with the French carmaker.

On Tuesday, Chery reached an agreement with Fiat to make Chery, Fiat and Alfa Romeo cars for the domestic market.

(China Daily August 11, 2007)

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