Analysis of the Automobile Industry in Iran - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Iranian automobile Industry (henceforth, referred to as the market studied) is segmented by Vehicle Type (Passenger Cars, Commercial Vehicles, and Motorcycles) and by Manufacturer Type (Auto Ancillaries, Engine, and Other Components). The report offers market size and forecast for market in value (in USD billion) for all the above segments.

Market Snapshot

Iran Automobile Market Overview
Study Period: 2018-2027
Base Year: 2021
CAGR: 9.57 %
Iran Automobile Market Key Players

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Market Overview

The Iranian automobile market was valued at USD 26.43 billion in 2020, and it is expected to reach USD 45.56 billion by 2026 by registering a CAGR of about 9.57% during the forecast period (2021 - 2026).

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 government in the country is taking the necessary actions to boost the productions of vehicles and parts locally to meet the demand for vehicles and reduce its import cost at the same time, market to witness steady and consistent growth during the forecast period.

Moreover, major car manufacturers in the country are also increasing their production with locally manufactured parts and components. Apart from these factors, ongoing projects, and rising e-commerce activities to further propel demand in the market. In addition, Iran's auto sector has also become self-sufficient in the production of some parts to some extent after which foreign companies stopped supplying car kits to Iran when the United States reimposedsanctions on the Islamic Republic in 2018.

Apart from government, local OEMs are also entering into agreements and associations with the university, research institutes to upgrade the manufacturing technology related to auto parts and components which further expected to boost demand in the market during the forecast period.

Scope of the Report

The report covers the situation of Iran and predicts the growth of its automobile market, the growth, market trends, progress, challenges, opportunities, government regulations, technologies in use, growth forecasts, major companies, upcoming companies, and projects, etc., in the automobile sector of Iran. The scope of report covers segmentation based on vehicle type and manufacturer type.

By Vehicle Type, the market is segmented into Passenger Cars, Commercial Vehicles, and Motorcycles. By Manufacturer Type, the market is segmented into Auto ancillaries, Engine, and Other components. For each segment, market sizing and forecast have been done on basis of Value (USD billion).

By Vehicle Type
Passenger Cars
Commercial Vehicles
Motor Cycles
By Manufacturer Type
Auto Ancillaries
Engine
Other Components

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Key Market Trends

Passenger Car Sales Expected to Dominate the Iranian Automobile Industry

Iran is one of the largest automotive markets in the Middle East owing to growing domestic production of auto components and rising consumer demand. However, the impact of sanctions and geopolitical turbulence is inevitable on the market. The international sanctions have had a tremendous impact on the industrial development of many industries in the country. Iran, which is the largest automotive market in the Middle East with a market of nearly one-third of the German automotive market, has seen a drop in the automotive industry with the implementation of the sanctions.

Despite the stringent lockdown and social distancing norms in the global scenario and the disturbing political geographies nearby the country, Iran showed good numbers in automotive sales and production. For instance,

  • In 2020, the passenger cars production in Iran registered 826,210 units with a rise of 7% compared to the previous year. Full-year sales for passenger cars in 2020 have been recorded at 816,497 units, reporting an 8.7% increase in sales compared to 2019

Moreover, with increasing demand for passenger cars in the country, the major OEMs are planning to launch latest models. For instance,

  • In February 2020, Iran Khodro made an announcement that the company is going to launch 9 new vehicles in the country in the coming 3 three years. The company announced Rana Plus, Soren Plus, Samand Optimal, Automatic Dana Plus, and Peugeot Panorama are five models that will be developed in the upcoming years, while K132s, Crossover K125s, and Hatchback K121s, as well as a Hybrid Dena, will also be launched by January 2023.
Iran Automobile Market Key Trends

Latest Developments to Encourage Engine Manufacturers in Iran Automobile Industry

Iran's automotive engine and engine components have considerably increased during the past several years with fast growth in population and need for vehicles. In its 2025 grand economic plan, Iran aims to become the number one automotive industry of the Middle East region, aiming to rank fifth in Asia and eleventh globally.

Primary factors contributing towards 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 huge potential for private sector investments.

  • The two biggest automakers in Iran, IKCO and SAIPA together developed in-house capabilities with their experience of making engines for international OEMs. Together both companies have manufactured about a million engines in 2018 alone for their various vehicles.

With homegrown engine manufacturing established to meet the growing demand of vehicles in the country, and EV adoption still being in early stages, the market is expected to grow positively during the forecast period. For instance,

  • Renault set up a local engine manufacturing plant in Iran in 2017 with a joint venture with Parto Negin Naseh (Negin Holdings) and the Industrial Development & Renovation Organization of Iran (IDRO).

Therefore, in light of above-mentioned instances, engine segment of Iran automobile industry expected to witness positive growth over the forecast period.

Iran Automobile Market Growth Rate

Competitive Landscape

Iran's Automobile Industry is fairly consolidated market. There are many major local players in the country, such as IKCO, SAIPA, Pars Khodro, Kerman, and Bahman, who manufacture a variety of different 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. For instance,

  • In June 2020, To boost local manufacturing, IKCO launched 175 projects to strengthen the auto part localization and cut down the import expenses by EUR 246 million.
  • In January 2020, the Iranian government announced it has launched a heavy-duty truck manufacturing plant. The first phase of the plant for the production of Chapar (Carrier) trucks, which started operation in Meshginshahr in Northwest Iran. The plant will produce 50 trucks a day at full production.
  • In October 2019, Sazehgostar SAIPA signed an agreement worth IRR 180 billion (USD 1.6 million) with a local knowledge-based firm Pars Iranian Saman, for the domestic production of car lamps.

Recent Developments

  • In January 2021, The Iranian Transport and Urban Development Ministry, in collaboration with the domestic firm Supplying Automotive Parts Company (SAPCO) has started a program for renovating the country's intercity passenger car fleet. In this regard, IRR 800 million (about USD 19,000) of bank facilities, at an interest rate of 4%, may be provided to the owners of old cars to purchase the new cars.
  • In August 2021, Iran’s major automaker SAIPA announced plans to increase production by 12% by March 2022 by introducing brand new models in its product lineup. The company also announced that it plans to produce 50,000 Shahin, 15,000 Aria, 20,000 Atlas, 147,000 Quick, 100,000 Tiba, and 79,000 Saina models by the end of 2021.
  • In February 2020, SAIPA and MAPNA Group signed a memorandum of understanding to develop and produce electric vehicle. The two companies planned to collaborate on the design, prototyping, testing, commercialization, and production of new electric vehicles.
  • In February 2020, SAPCO has signed 80 agreements with two domestic giant automakers, Iran Khodro (IKCO) and SAIPA, as part of its efforts for curbing reliance on foreign resources. The agreements focus on producing an electronic stability control system, a hydraulic wheel for IKCO's Peugeot 206 model, and refrigerant gas used in chiller systems of vehicles.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Passenger Cars

      2. 5.1.2 Commercial Vehicles

      3. 5.1.3 Motor Cycles

    2. 5.2 By Manufacturer Type

      1. 5.2.1 Auto Ancillaries

      2. 5.2.2 Engine

      3. 5.2.3 Other Components

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Automobile Manufacturers

        1. 6.2.1.1 Iran Khodro (IKCO)

        2. 6.2.1.2 Pars Khodro

        3. 6.2.1.3 SAIPA Corporation

        4. 6.2.1.4 Renault Pars

        5. 6.2.1.5 Volkswagen Group

        6. 6.2.1.6 Hyundai Motor Company

        7. 6.2.1.7 Kia Motors Corporation

      2. 6.2.2 Auto Component Manufacturers

        1. 6.2.2.1 Sazeh Gostar

        2. 6.2.2.2 Bahman Group

        3. 6.2.2.3 Monavari Brothers Industrial Group

        4. 6.2.2.4 SAPCO

        5. 6.2.2.5 IPMC

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. GOVERNMENT INITIATIVES IN IRAN AUTOMOTIVE MARKET

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Frequently Asked Questions

The Analysis of the Automobile Industry in Iran market is studied from 2018 - 2026.

The Analysis of the Automobile Industry in Iran is growing at a CAGR of 9.57% over the next 5 years.

The Analysis of the Automobile Industry in Iran is valued at 26 Billion USD in 2018.

The Analysis of the Automobile Industry in Iran is valued at 46 Billion USD in 2026.

Iran Khodro Company, Pars Khodro, Renault Pars, Volkswagen Group, SAIPA Corporation are the major companies operating in Analysis of the Automobile Industry in Iran.

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