Sanction effects on the Iranian Automotive Market
Iran Automotive Industry Outlook 2025
Over the past years sanctions have had a serious effect on Iran’s economy and its people. Since 1979 the United States has led international efforts to utilize sanctions in order to influence Iran’s policies, including Iran’s uranium enrichment program which Western governments fear is intended for developing the capability to produce nuclear weapons. Iran counters that its nuclear program is for civilian purposes, including generating electricity and medical purposes.
Started since 2007
|Prohibitions and/or restrictions on:
The import, purchase, transport, financing and insurance of Iranian crude oil and petroleum products;
Started since 1997
|The US sanctions on Iran relate to:
Iranian petroleum industry
Started since 2006
|UN sanctions include provisions calling on Member States to:
Prevent the provision of financial services, or the transfer of any financial or other assets or
On July 14th 2015, the P5+1 and Iran reached a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful. October 18th 2015 marks “Adoption Day” under the JCPOA. The agreement provides that in return for verifiably abiding by its commitments, Iran will receive relief from the U.S., European Union, and United Nations Security Council nuclear-related sanctions. “Implementation Day” was initiated on January 16th 2016.
Despite the fact that Iran’s economy has been suffering from the effects of intensified international sanctions since 2007, different industrial sectors have shown deviating levels of instability.
Since 2010, the Iranian total passenger car production dropped considerably, as a direct effect of the sanctions impact on the automotive sector.
Chinese automotive companies have gained a wide presence in the Iranian automotive market since 2010 by taking advantage of the sanction situation, mostly through cooperation’s with domestic automakers (mainly the private ones). One of the first Chinese players in Iran was Chery, however, ever since many other brands have entered adding up to a total of ten today. Those ten Chinese automakers have so far launched 30 different models in a variety of price ranges. Some experts say that the private automotive sector is dominated by the Chinese. Furthermore, large numbers of vehicle imports from China have been accounted for.
According to research from IHS Automotive Assessment, in 2011 Chinese car manufacturers held around one percent of the Iranian car market and by 2015 their share had increased to approximately nine percent. Furthermore, they are ambitious about increasing their retail business.
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