IRANIAN CARS HIT TURKISH ROADS: "BUSINESS AS

C O N F I D E N T I A L ISTANBUL 001016

SIPDIS

SIPDIS

LONDON FOR GAYLE; BERLIN FOR PAETZOLD; BAKU FOR HAUGEN;
DUBAI FOR IRPO

E.O. 12958: DECL: 11/27/2017
TAGS: ECON PREL IR TU
SUBJECT: IRANIAN CARS HIT TURKISH ROADS: "BUSINESS AS
USUAL" IN THE AUTOMOTIVE IMPORT BUSINESS

Classified By: DPO Sandra Oudkirk; Reason 1.5 (d)


1. (SBU) According to Turkish press accounts, MYS
Otomotive, a Turkish automotive distribution company, has
begun to sell Iranian-made cars throughout Turkey.
Partnering with Iran's Khodro Company (IKCO),one of the
Middle East's largest car companies, MYS Otomotive is selling
two Khodro models: the "Samand", a mid-sized sedan
"westernized" to come with such modern amenities as ABS, air
conditioning, car alarm, and CD/MP3 player, and the "Sarir",
a limousine version of the Samand. The recommended asking
price for the Samand is 17,000 Turkish lira (about $15,000).
MYS Otomotive has distributed Samand cars to about 20
dealerships throughout Turkey.


2. (SBU) On November 26, we called MYS Otomotive,s
Chairman, Sukru Seskir, to seek more details about his
company's deal with IKCO. Seskir confirmed press reports
that his company's sales target for the next 12 months is to
sell 3,000 Samands. If there is demand for more, he is
prepared to import more. He said the process of working with
the GOT,s Ministry of Industry to secure approval and import
licenses took about eighteen months, which he said was about
the same length of time it took him to get a similar import
deal for Romanian cars approved, suggesting the GOT treated
this import deal as a case of "business as usual."


3. (SBU) Seskir said that negotiating the deal with IKCO was
no better or worse than negotiating with a Turkish company.
He has no plans for any joint automotive production with
IKCO. Beyond importing these models, MYS Otomotive does sell
car parts to IKCO, but that is the extent of his plans for
cooperation. Seskir was reluctant to describe the terms of
his deal with IKCO. He acknowledged, however, that plans to
bring Turkish journalists to IKCO,s car manufacturing plant
in Iran were proving difficult because a number of Turkish
journalists were worried that travel to Iran might jeopardize
their chances for obtaining a U.S. visa in the future.
Seskir proposed that his son, a company junior executive who
had studied in the U.S., serve as a contact point for the
Consulate if we have follow-up questions. Consulate Istanbul
Iran watcher will follow-up in coming weeks to assess how
well the Samand is selling in Turkey and whether MYS
Otomotive plans to increase its imports.


4. (C) Comment: Notwithstanding the relatively small size
of this deal, it is clear that both the GOT and MYS Otomotive
consider importing cars from Iran to be "business as usual",
and see no connection between such imports and the
international community's efforts to pressure the Iranian
regime to cease its destabilizing policies in the region.
Considering that Peugot, Renault, and Volkswagen also have
(much bigger) deals with IKCO, and considering the commercial
presence in Iran of such car companies as Hyundai, Mercedes,
Kia, Mazda, Citroen, Nissan, and Volvo, it may be worth
exploring the relative merits of working within the
international community to target the automotive industry in
Iran as a useful point of leverage against the Iranian
regime. As one Iranian expat recently told Consulate
Istanbul's Iran Watcher: there is no quicker way to upset an
Iranian than to take away his car. End comment.
WIENER