Iran Khodro Industrial Group (IKCO), the nation’s largest automaker, unveiled the latest Rira crossover at its western Tehran facility. During the event, chief executive Mehdi Khatibi outlined plans to expand IKCO’s presence in Russia as early as 2022, according to a report in the International Business Times edition.
“We will concentrate on the Russian market and are exploring partnerships with Russian investors. Negotiations with Moscow have progressed well,” Khatibi said.
The senior leader described Russia as one of IKCO’s most strategic export destinations. He indicated that shipments to Russia could commence in 2022.
Iranian vice president Khodro Kianush Pourmojib echoed the ambition, stating that Russia should become the largest market for IKCO vehicles. The plan envisions producing more than half a million cars annually and growing sales in other regions to about 100,000 units within three years, up from roughly 20,000 today.
Persian horses
IKCO already had a footprint in Russia with the Samand sedan, based on the Peugeot 405, produced from 2006 to 2009. At that time, prices hovered around 11,000 dollars, a level higher than the Renault Logan option.
Over the years, about 12,000 IKCO vehicles were sold in Russia, but deliveries were constrained by Euro 4 standards and sanctions on Iran. Auto reviews noted that many advertisements advertised 16-year-old sedans at approximately 150,000 rubles on average.
Iranian manufacturers have produced converted Peugeots under their own branding and introduced crossovers from Chinese brands Haima and Dongfeng. The Peugeot 405 platform, including the Samand, served as the production base for more than three decades until 2019, when the line was halted for being outdated.
Now IKCO is preparing to launch the Rira, described by local media as the country’s first true nationwide showcase vehicle. It relies on a modified IKP1 platform, a localized version of the PSA Peugeot Citroën architecture used by models such as the Peugeot 208, 508 and 2008, as well as the Citroën C-Elysée.
The front-wheel-drive Rira will be powered by a 1.6-liter engine lineup with 113 hp in naturally aspirated form and 168 hp in turbocharged form, paired with a six-speed automatic transmission. The company’s chief executive indicated a starting price around 600 million Iranian rials, roughly 875 thousand rubles at current exchange rates.
Another IKCO offering, the Tara compact sedan, has also been built on the same platform since 2021. It is a refreshed version of the Peugeot 301 that Russian buyers have known since 2012. In ruble terms, the Tara sits around 1 million rubles locally. IKCO and other models showcased the Tara at Moscow’s Interauto show last year, though the event did not lead to further commitments.
Are the plans realistic?
A Russian market expert believes IKCO will manage deliveries within the year and secure vehicle type approval in three to four months to begin sales. The consultant noted that IKCO has, over several years, grown capable in component production and system integration, improving vehicles beyond earlier limitations.
However, the analyst warned that Iranian cars would be more expensive in Russia due to value-added tax, corporate import taxes, and recycling fees. If IKCO chooses to assemble cars locally in Russia, state support and incentives under a private investment contract could be attractive. The expert emphasized that joint ventures or asset acquisitions in Russia could attract strong government backing and enable broader production capacity, with existing plants capable of full-cycle manufacture for higher demand.
Possible sites include Derways in Cherkessk and Stavropol Auto, a GAZ Group subsidiary where Volkswagen and Skoda are assembled in Nizhny Novgorod. Given IKCO’s ongoing ties with Peugeot Citroën, collaboration with the Stellantis group could also be explored. A dedicated distribution and dealership network would be essential, as current foreign networks in Europe, the Americas, Korea, and China would not directly translate to the Russian market. Substantial tariff barriers on imported cars could limit volumes unless localization progresses. An Iranian assembly presence would likely be required to maximize incentives under a private investment framework, the expert added.
On logistics, three routes—rail, road, and sea—connect Iran and Russia, and all appear functional, suggesting steady supply chains. Industry observers note that most parallel imports entering Russia target premium segments, leaving room for a genuine Iranian entry. If conditions hold, IKCO could fill the gap left by limited European brands in the market, according to a Russian industry insider.
[1] Market experts and regional analysts provide context for IKCO’s expansion plans in the Russian automotive sector.