Chrysler in Iran: the Hillman Arrow and Iran Khodro Paykan

After Iran tried several times, without success, to make Fiat cars, two brothers created Iran National Factories (Iran Khodro) in 1962 to build the Hillman Arrow. At the time, Chrysler owned a large portion of Hillman, but had little do with engineering the Arrow, a conventional, comfortable rear-wheel-drive small car.

hillman hunter - iran khodro paykan cars

The first Iran Khodro car, the 1967 Paykan, was sold in Deluxe and Standard models, with taxis added later. A commercial Pakyan was added around 1969, an automatic model in 1970, and a GT in 1972; a light-duty pickup joined the line. Around 6,000 were made in the first year, but production ramped up after that.

The Paykan kept going long after Hillman’s lines moved to Spain and then closed down; Peugeot provided Iran Khodro with Peugeot 504 engines and suspension systems, since the original components were no longer available. (The Peugeot 504 was a fairly upscale model and the use of those components probably made the Paykan more desirable, and more costly, for those six years).

Burton Bouwkamp, product leader of Chrysler Europe from 1975 to 1979, wrote:

Chrysler UK supplied Hillman Arrow powertrains (1725 cc) to Iran National for the Iran Paykan (Iranian for “Arrow”). When I was Director of Product Development (1975-1979) in England, John Haig was head of Manufacturing Engineering. When Iran National decided to build more of the Paykan, John went to Iran on assignment to help them build cars. Prior to that Iran National assembled them from knockdown kits.

arrowThey built the Hillman Arrow body in Tehran and assembled almost 100,000 vehicles a year. Chrysler provided technical assistance to Iran National in building the assembly plant and paint shop, and we also people in Iran assist in building the vehicles. Chrysler people left the country when the Shah was overthrown in 1979. The Hyami brothers, who owned Iran National, left Iran just in the nick of time. The last I heard was that they became a Mercedes dealer in Irwin, California. John was in Iran until the Shah was deposed - and he got out just in time.

A sustained effort to make all components in-house yielded success, and the early 1990s, they were producing almost 98% of the parts needed for Paykan 1600 in Iran - 120,000 cars per year - using machinery purchased from the former Chrysler division. The 1600 was fully locally made starting in September 1992.

paykan cars by iran khodroAs the largest vehicle manufacturing industrial complex in Iran, Iran Khodro decided to establish a research center in 1994, aimed at acquiring automobile design and engineering know-how. The first original Iranian car, titled the New Paykan, was slowly developed.

The production of the final Paykan car was on May 15, 2005. Iranian officials put down the car, engineered in the 1960s, which had created Iran’s auto industry and served it for so long. They complained about its dated (four decades old) styling and inefficient powertrain.

2.3 million Paykan cars have been made. Recently local production has begun of the Peugeot 405 and 206, and Iran Khodro is working with Renault on a local version of the Logan (a cheap, sturdy, low-technology car) to replace the New Paykan. A 2005 article noted that Paykans, regardless of age, still sell used for about $6,850, which is close to the price for new Paykans.

Information courtesy Iran Khodro Industrial Group and Iranmania.com (thanks, Mike Sealey).

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