Outlook of Iran Automobile Industry

Iran Automobile industry industry plays an important role within the Iranian economy, with a turnover of approximately 12 billion USD and making up for 12% of the countries workforce. After sanctions were enforced in 2007 the automotive industry faced many challenges, however, with recent agreements between Iran and the P5+1 the Iranian automotive sector will remain a key driver of the economy.

Numerous paradigm shifts have already occurred and others are bound to follow:

Recent visits by delegations from Germany, Italy, France and Japan for post-sanction cooperation. Most likely Iran will sign collaboration agreements with one or two European companies and two Asian ones – some experts argue that both Germany and France will definitely enter Iran whole heartedly, and Asian countries will include the Chinese, Koreans and Japanese

Partnerships with major international automotive OEM will demand their direct investment and technology transfer – condition will be to provide new technologies and also to support the countries exports

Promoting tier manufacturers

Co-operations between OEM´s and banks to receive financial aid

Developing export ratios and improving vehicle production capacity

Determining the price by market rather than government

Improving the utilization of technology in buying / selling

Reducing the role of middle men, also by increasing online supply in order to reduce prices

Although the Iranian automotive industry has a clear strategic plan until 2025 with the aim of reaching a production of 3 million units, ILIA predicts that total production cannot exceed 2 million PV by 2025. Furthermore, ILIA anticipates that the industry will collaborate with German and French companies under joint venture agreements, and that the Chinese will continue pushing their products into the market.

ILIA is of the firm opinion that no matter the direction that the Iranian automotive industry will take, it is certain that the government will continue to directly and indirectly support this industry.