Iran Automobile Industry Analysis- Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
The Iranian automobile market was valued at USD 28.85 billion and is expected to reach USD 49.92 billion, registering a CAGR of 9.57% over the upcoming period.
The automobile industry in Iran witnessed a decline in growth due to the COVID-19 pandemic and sanctions imposed by countries like United States on Iran. However, as the government in the country is taking the necessary actions to boost the production of vehicles and parts locally to meet the demand and reduce its import cost simultaneously, the market is expected to witness steady and consistent growth during the forecast period. The major car manufacturers in the country are increasing their production with locally manufactured parts and components. For instance,
Key HighlightsOver the long term, local OEMs and major manufacturers in the country are also entering into agreements and associations with the university and research institutes to upgrade the manufacturing technology related to auto parts and components, which is expected to boost the market during the forecast period further. For instance,
Key HighlightsWith an annual production of more than 1.6 million vehicles, Iran is the world's 20th-largest automaker and one of the largest in Asia. Currently, Iranian manufacturers produce six different types of vehicles: passenger cars, 4WD, trucks, buses, minibusses, and pickup trucks. Passenger cars account for approximately 75% of local output, with pick-up trucks accounting for about 15%.
Key Market TrendsIranian Automobile Industry is Expected to Hold the Considerable Market Share in the Forecast PeriodIran, being the largest automotive market in the Middle East with a market of nearly one-third of German automotive players, has seen fluctuations in the automotive industry since 2012 due to the implementation of the sanctions. The international sanctions had a tremendous impact on the development of many industries in the country, including the automotive industry.
Despite the stringent lockdown and social distancing norms in the global scenario and the disturbing political geographies, Iran showed good numbers in automotive sales and production.
Moreover, with increasing demand for passenger cars in the country, the major OEMs are planning to launch the latest models.
With an improving economy, the country is expected to experience a sales boom for medium-priced cars (such as sedans). The emergence of local automotive component hubs is expected to further contribute to the overall development of the passenger car segment of the market during the forecast period.
Latest Developments to Encourage Engine Manufacturers in the Iranian Automobile IndustryIran's automotive engine and engine components market had a considerably fast growth in the past few years due to the population and the need for vehicles. In its 2025 grand economic plan, Iran plans to become the number one automotive industry in the Middle Eastern region, aiming to rank fifth in Asia and eleventh globally.
Primary factors contributing toward the increase in production activity in auto parts and components are the government’s support plans for the auto sector, increasing skilled and educated workforce, and the massive potential for private sector investments.
The home-grown car industry in Iran has pushed manufacturers to invest and develop their engines without any partnership with foreign players. As EV adoption is in its early stages, the market is expected to grow positively during the forecast period. Key players in Iran are also focusing on developing EVs in the country. For instance,
Therefore, owing to the above-mentioned factors, the engine segment is expected to witness positive growth over the forecast period.
Competitive LandscapeIran's automobile industry is a moderately consolidated market. Many major local players in the country, such as IKCO, SAIPA, Pars Khodro, Kerman, and Bahman, manufacture various models (such as Samand, Tiba, Dena, etc.). IKCO and SAIPA are the biggest automotive manufacturers. Many players are in planning to ramp up production output in the coming years.
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