Chery, Iran Khodro and Canada Solitac Enter into an Agreement of Joint Venture

Chery, Iran Khodro and Canada Solitac Enter into an Agreement of Joint Venture

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(Wuhu, August 10, 2007) Through more than one year of contact and negotiation, Chery Automotive Co., Ltd., Iran’s largest automobile group Khodro and Canada investment company Solitac eventually entered into an agreement on the joint establishment of a plant in Iran.

Located in Babol, Mazadaran in the north of Iran, the joint-funded plant boasts a total investment of USD 370 million with the proportionate shares of Chery, Khodro and Solitac as 30%, 49% and 21% respectively. The joint venture will manufacture S21 (QQ6) with the CKDs supplied by Chery and conduct marketing in Iran and its surrounding countries.

Dr. Manteghi, CEO of Khodro, expressed, “Chery’s models can perfectly meet the demands of the Iranian market and the cooperation with Chery will further improve our competitiveness in Iran and the surrounding markets.”

Mr. Yin Tongyao, president and general manager of Chery Automotive Co., Ltd, expressed, “Our cooperation with the strong Khodro which is Iran’s largest automobile manufacturer as well as Solitac is bound to benefit all the three parties, also, it can strengthen Chery’s competitiveness in Iran or even in the entire Middle East market so as to build up Chery into a ‘Chinese brand in the world market’.”

The joint-funded project, with a maximum designed annual output of 200,000 cars, will start officially after 9 months

Leaders such as Mr. Naseri, member of the Iranian parliament, Mr. Shafeghat, governor of Mazadaran, Mr. Zhan Xialai, member of the Standing Committee of Anhui Provincial Committee of Communist Party of China and General Secretary of Wuhu Municipal Committee of Communist Party of China and Mr. Hong Jianping, vice mayor of Wuhu attended the signing ceremony.

Background:
Over the past ten years since its establishment, Chery has gained rapid development both at home and abroad, so far, Chery has presented 10 models including Eastar, Tiggo 3, A5, Cowin, V5, A1, Karry, Riich II ,QQ3 and QQ6, and also Chery CAC and Chery ACTECO two engine series. Also, Chery is the pacemaker of development of Chinese auto brands in the overseas market, from exporting the first batch of 10 Chery cars to Syria on October 27, 2001 to 50,000 cars of global export in 2006, to 52,712 cars export in the first half of 2007, Chery has taken the lead in exports among all Chinese cars.

Founded in 1962, Khodro is Iran’s largest automobile manufacturer mainly engaged in the production and sales of various trailers, trucks and cars, holds a share of 60% of the Iranian market and has Iran’s largest distribution system consisting of 12 business offices and 674 distributors. As a principal long-term technical partner of Peugeot France, Khodro has been authorized to manufacture such models as Peugeot 405, Peugeot 206 and Peugeot RP in Iran, however, the manufacture of its major model Samand is exactly based on Peugeot 405 platform.

Founded in 1998, Canada Solitac is mainly engaged in the design of nonstandard automotive equipment and automotive parts & components at the beginning of its establishment and expanded its business to the field of trade development in 2001.