Analysis of the Automobile Industry in Iran - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Iranian automobile market is segmented by Vehicle Type (Passenger Cars and Commercial Vehicles). The report offers market size and forecast in terms of value (in USD Billion), for all the above segments.

Market Snapshot

Iran Automobile Market Overview
Study Period: 2018 - 2026
Base Year: 2020
CAGR: >5 %

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Market Overview

The Iranian automobile market was valued at over USD 33 billion in 2020, and it is expected to reach a value of more than USD 45 billion by 2026 while registering a CAGR of over 5% during the forecast period.

With the spread of the COVID-19 disease, the automobile industry of Iran was affected and witnessed a decline in growth due to the lockdown situation, owing to which the purchasing power of people dropped significantly. Thus, this resulted in low vehicle sales in the country. However, now the country is witnessing slow growth, and the industry is likely to grow over the forecast period.

The Iranian automobile industry stands as the 12th largest automaker in the world. With the total sales revenue of USD 12 billion, it makes up for approximately 19% of the total industry output in Iran, as well as for approximately 2.5% - 3% of Iran’s GDP. Furthermore, it is responsible for a 14% added value creation contribution to the whole industry. The average profit of the industry is 4.5%. As Iran is one of the major vehicle manufacturing countries in the Middle Eastern region, it exports its vehicles and spare parts to its neighboring countries.

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 Iran Automotive market is segmented as Passenger Cars and Commercial Vehicles

By Vehicle Type
Passenger Cars
Commercial Vehicles

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Key Market Trends

Passenger Car Sales are Dominating the Iranian Automobile Industry

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. The market boasted a healthy 8.7% increase in year-on-year sales and 820,400 units of sales in 2020 across all types of vehicles and manufacturers.

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.

Eventually, the Iranian automotive industry became self-reliant and self-sufficient to supply the demand within the country. The country had reached the potential to roll out more than a million vehicles. Ever since the implementation of the sanctions, the demand for vehicles is being met by the vehicles manufactured in the country only. In 2020, around 820 thousand passenger cars were produced within Iran. This was an increase of 7% in passenger cars in 2019. Iran was the leading passenger car producer in the Middle Eastern region.

The sanctions gave birth to domestic companies, such as IKCO and SAIPA, which have a major share of the passenger vehicle sales in the country. When implementing the sanctions, the percentage share of the indigenous companies of the overall vehicle production reached as high as 85%. However, with the removal of the sanctions, domestic companies are expected to join forces with international companies, such as Peugeot, Daimler, Jaguar, etc., to introduce the latest vehicles in the country.

Analysis Of Automobile Industry In Iran_Key Market Trend1

Decrease in Vehicle Production Due to Imposed Sanctions

After this surge in automotive production, multinational companies started taking an interest in investing in the country, followed by the nuke deal signed in January 2015, which had attracted attention to Iran’s automotive industry. For Instance;

  • Peugeot partnered with the local leading company, Iran Khodro, to manufacture passenger vehicles. Khodro is already behind schedule for advance bookings. Iran was Peugeot’s second-biggest market after France, with a sales volume of around 400,000 cars a year until 2012.

However, the production of new vehicles in 2018 in Iran slightly decreased due to currency crises and other byproducts of sanctions. Internation automobile companies that produced cars in Iran, such as Peugeot and Renault, decided to stop their operations because the US sanctions were also imposed on any company that did business with Iran. Renewed sanctions led to delays in car deliveries and a shortage of parts.

Three mentioned major Iranian carmakers, IKCO, SAIPA, and Pars Khodro, had manufactured more than 50% vehicles in 2020 , which was 4.3 percent more than the figure of its preceding year.

In June 2021, SAPCO has devised a scheme for the indigenization of metal and non-metal components worth EUR 26 million for the years 2021-2022. the localization scheme has been split into 20 projects that are to employ high-tech solutions offered by the local technology ecosystem

Analysis Of Automobile Industry In Iran_Key Market Trend2

Competitive Landscape

Iran's Automobile Industry is fairly consolidated. 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 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.

Recent Developments

  • In June 2020, Iran's National Development Fund (NDF) announced that it would allocate USD 1 billion from its national reserves to support automakers in the country amid a long-standing economic crisis largely caused by the US-imposed sanctions.
  • In February 2020, MAPNA Group has signed a Memorandum of Understanding (MOU) with the country’s second-biggest auto-maker Saipa Group for mass production of the country’s first electric vehicle.
  • 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.

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

  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 Company

        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

        8. 6.2.1.8 * List Not Exhaustive

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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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 >5% over the next 5 years.

The Analysis of the Automobile Industry in Iran is valued at 33 Billion USD in 2018.

The Analysis of the Automobile Industry in Iran is valued at 45 Billion USD in 2026.

Iran Khodro Company, Pars Khodro, Renault Pars, Nissan, Saipa Motor Corporation are the major companies operating in Analysis of the Automobile Industry in Iran.

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