Iran Automobile Industry Analysis- Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Iranian Automobile Industry is segmented by Vehicle Type (Passenger Cars, Commercial Vehicles, and Motorcycles) and Manufacturer Type (Auto Ancillaries, Engines, and Other Manufacturer Types). The report offers market size and forecast for the market in value (in USD billion) for all the above segments.

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Iran Automobile Market Size

Iranian Automobile Market Summary
Study Period: 2018-2027
CAGR: 9.57 %

Major Players

Iranian Automobile Market Major Players

*Disclaimer: Major Players sorted in no particular order
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Iran Automobile Market Analysis

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 the 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,

  • In September 2022, IKCO, the largest car manufacturer in Iran, announced its first electric car for commercial purposes, which is set to be launched in March 2023. The IKCO technology arm Jetco has designed and developed this model with a battery pack of 45 kWh and can travel 300 km on a full charge.

Over 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,

  • In October 2022, Six memorandums of understanding were signed between Iran Khodro Industrial Group and Saipa Automobile Group. These agreements cover the supply and purchase of raw materials and parts and establish joint engineering and R&D centers for manufacturing automotive in the country.

With 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%.

Iran Automobile Industry Segmentation

The auto industry is a major driving force in Iran, keeping more than 60 other industries running and prospering. The industry is only second to the energy sector in terms of GDP and employment, accounting for 10% of GDP and 4% of employment. More than 100,000 people are employed by Iran Khodro (IKCO) and Saipa, the two largest local manufacturers, while another 700,000 Iranians work in industries related to car manufacturing. 

The Iranian Automobile Industry is segmented by Vehicle Type (Passenger Cars, Commercial Vehicles, and Motorcycles) and Manufacturer Type (Auto Ancillaries, Engines, and Other Manufacturer Types). The report offers market size and forecast for the market in value (in USD billion) for all the above segments.

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

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Iran Automobile Market Trends

This section covers the major market trends shaping the Iran Automobile Market according to our research experts:

Iranian Automobile Industry is Expected to Hold the Considerable Market Share in the Forecast Period

Iran, 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.

  • In 2021, Iran produced approximately 838 thousand passenger cars. This represents an increase from 826 thousand passenger cars produced in 2020. Iran was the Middle East's leading passenger car manufacturer.

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

  • In August 2022, the Tara automatic car was announced and presented by Iran Khodro Industrial Group as the most modern and up-to-date car of domestic production in Iran. Iran Khodro was able to showcase its new products and capabilities to potential customers at this specialized automobile exhibition.

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.

Iranian Automobile Market: Number of Passenger Cars Produced in Iran from 2016 to 2021

Latest Developments to Encourage Engine Manufacturers in the Iranian Automobile Industry

Iran'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,

  • In January 2021, Iran’s most prominent automotive firm, the Iran Khodro Company (IKCO), unveiled a domestically-made three-cylinder engine, EC5.

Therefore, owing to the above-mentioned factors, the engine segment is expected to witness positive growth over the forecast period.

Iranian Automobile Market: Unit Sales (in thousand) of EV in Iran from 2016 to 2021

Iran Automobile Industry Overview

Iran'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.

  • In October 2022, Iran Trade Promotion Organization (TPOI) announced the opening of an auto production line in Armenia to export manufactured cars to the Eurasian Economic Union (EAEU) states.

Iran Automobile Market Leaders

  1. Stellantis N.V.

  2. Iran Khodro

  3. SAIPA

  4. Volkswagen AG

  5. Bahman Group

*Disclaimer: Major Players sorted in no particular order

Iranian Automobile Market Concentration

Iran Automobile Market News

  • Oct 2022- Iran Khodro Company (IKCO), the country's largest carmaker, unveiled its second new model in five months to diversify its products and increase domestic and international sales. During a ceremony, the TF21 was unveiled at the company's headquarters in western Tehran. A 16-valve 110-horsepower TU5P engine powers the TF21, and it will be available with 5-speed manual and 6-speed automatic transmissions.
  • Jan 2021- The Iranian Transport and Urban Development Ministry, in collaboration with the domestic firm Supplying Automotive Parts Company (SAPCO), 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 new cars.
  • Aug 2021- Iran’s major automaker, SAIPA, announced plans to increase production by 12% by March 2022 by introducing brand new models in its product line-up. 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.

Iran Automobile Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    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 Forces 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 Motorcycles

    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 THE IRANIAN AUTOMOTIVE MARKET

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Iran Automobile Market Research FAQs

The Iran Automobile Industry Analysis market is studied from 2018 - 2027.

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

The Iran Automobile Industry Analysis is valued at 28 Billion USD in 2018.

The Iran Automobile Industry Analysis is valued at 49 Billion USD in 2027.

Stellantis N.V. , Iran Khodro, SAIPA, Volkswagen AG, Bahman Group are the major companies operating in Iran Automobile Industry Analysis.

Iran Automobile Industry Analysis Industry Report

Statistics for the 2023 Iran Automobile Industry Analysis market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Iran Automobile Industry Analysis analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

Iran Automobile Industry Analysis Report Snapshots

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