Automotive Industry In Iran Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

The Iran Vehicles Market Report is Segmented by Vehicle Type (Passenger Cars [Hatchback, Sedan, and More], Light Commercial Vehicles, and More), Fuel Type (Gasoline, Diesel, Hybrid Electric, and More), Ownership (Domestic Brands and Imported Brands), and Customer Type (Individual Consumers, Fleet and Commercial Operators, and More). The Market Forecasts are Provided in Terms of Value (USD) and Volume (Units).

Iran Vehicles Market Size and Share

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Iran Vehicles Market Analysis by Mordor Intelligence

The Iranian vehicle market is valued at USD 41.57 billion in 2025 and is forecast to reach USD 54.51 billion in 2030, progressing at a 5.57% CAGR oica.net. Demand momentum is tied to robust domestic production of vehicles in 2023, wider policy support for compressed natural gas (CNG) vehicles, and a gradual reopening to foreign joint ventures. Competitive intensity remains moderate because the top two domestic manufacturers together control almost 80% of sales. Power-train diversification, ride-hailing growth, and barter-based supply-chain fixes are shaping investment priorities while currency volatility and electricity-grid constraints temper near-term optimism.

Key Report Takeaways

  • By vehicle type, passenger cars led with 52.64% of Iran's automotive market share in 2024 and are projected to expand at an 11.25% CAGR through 2030.
  • By fuel type, gasoline models commanded 67.85% of the Iranian automotive market size in 2024, whereas hybrid electric vehicles are advancing at 12.74% CAGR to 2030.
  • By ownership, domestic brands held 72.33% of Iran automotive market share in 2024; imported brands recorded the fastest CAGR at 9.61% for 2025-2030.
  • By customer type, individual consumers accounted for 61.92% of the Iranian automotive market size in 2024; fleet and commercial buyers posted the highest 8.83% CAGR through 2030.

Segment Analysis

By Vehicle Type: Sedans Hold Leadership as EVs Accelerate

Passenger cars, particularly sedans, retained a 52.64% share of the Iranian vehicle market in 2024, underpinned by urban commuting needs and well-established domestic platforms. Legacy models such as Iran Khodro Samand and SAIPA Tiba deliver familiar serviceability and low operating costs. The segment is growing at an 11.25% CAGR on the back of government programmes to deploy 100,000 electric taxis and expanding public charging corridors. The sedan segment, therefore, faces an evolutionary pivot toward electrified variants, while light commercial vehicles ride the surge in ride-hailing and last-mile delivery. Sport utility and multi-purpose vehicles remain aspirational choices for an emerging middle class.

Platform updates reflect a strategic shift to designs that accommodate multiple fuel types and enhanced safety features, replacing legacy models whose production has recently been halted. Manufacturers are retooling lines for flexible body-on-frame architectures aimed at both passenger and commercial derivatives. The Iranian vehicle market also sees bus and coach renewal programmes that retire aging diesel fleets in favor of CNG and hybrid units, supporting public-transport modernization initiatives.

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Note: Segment shares of all individual segments available upon report purchase

By Fuel Type: Gasoline Dominance Meets Hybrid Momentum

Gasoline vehicles still command 67.85% of Iran's vehicle market share in 2024 because refinery output satisfies most domestic demand, and subsidies keep pump prices low. Nevertheless, the Iranian vehicle market size for hybrid models is projected to climb rapidly at 12.74% CAGR, alongside policy mandates stipulating that half of annual production include alternative power-trains. Grid bottlenecks and a lack of fast chargers slow pure-battery adoption, but hybrids circumvent range anxiety while cutting fuel bills.

Hybrid uptake is accelerated by looming gasoline deficits that could force USD 2 billion in imports annually if consumption outpaces refinery upgrades. The government’s green-fleet targets and approval of premium gasoline imports at market rates encourage consumers toward fuel-efficient technology. Diesel vehicles remain essential for heavy freight, whereas CNG usage leverages Iran’s abundant natural gas, helping stabilize fuel security.

By Ownership: Domestic Stronghold Faces Import Liberalization

Domestic manufacturers controlled 72.33% of Iran's vehicle market share in 2024, owing to decades-long import curbs and a supportive industrial policy. Up to 1,200 parts makers feed this ecosystem, delivering cost advantages versus imported competitors. However, eased import regulations post-2023 enable foreign brands to capture pent-up demand for enhanced quality and feature sets, especially in premium and electric segments. Imported vehicles will likely erode their share gradually, but domestic OEMs benefit from continued scale and preferential financing.

Joint ventures serve as an intermediate path, combining local assembly economics with international technology, mitigating foreign-exchange demands tied to fully built imports. The marketplace is evolving into a mixed arena where domestic champions must raise product sophistication to retain relevance.

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By Customer Type: Individuals Lead, Fleets Surge

Individual buyers accounted for 61.92% of sales in 2024, reflecting the cultural premium on private mobility and the relative affordability conferred by low fuel prices. Yet fleet and commercial operators show the fastest 8.83% CAGR as ride-hailing platforms proliferate and e-commerce logistics mature. The Iranian vehicle market thus bifurcates: mass-market sedan volumes cater to households, while LCV and hybrid taxi demand grow among professional operators.

Government procurement also shapes specialized requirements such as armored pickups and public-transport buses. Fleet orders deliver higher utilization and predictable replacement cycles, encouraging OEMs to develop purpose-built commercial variants. Over time, shared mobility may temper individual ownership growth, but population dynamics and inadequate mass transit ensure a sizeable retail base.

Geography Analysis

Tehran province anchors the Iranian vehicle market with its dense population, skilled workforce, and adjacency to Iran Khodro and SAIPA plants. The clustering effect nurtures supplier ecosystems and research centers, reinforcing the capital’s centrality. Isfahan province follows, leveraging metallurgical assets and strategic crossroads that link national highways, making it a manufacturing and distribution hub.

East Azerbaijan, with Tabriz as its capital, offers proximity to Turkey and the Caucasus, giving joint ventures an export gateway. Khuzestan contributes petrochemical raw materials for plastics and hosts niche military vehicle production, integrating upstream and downstream value chains.

Northern provinces benefit from gas pipelines that buttress CNG vehicle rollouts, whereas southern coastal provinces provide port capacity for component inflows and prospective vehicle exports. Regional specialization balances national resilience: engine machining in Markazi, electronics in Qom, and glass in Yazd. The integrated geography supports the Iranian vehicle market’s ability to absorb shocks such as FX shortages by reallocating subassembly contracts within the country.

Competitive Landscape

Market structure is highly concentrated: Iran Khodro and SAIPA, together accounting for nearly half of unit sales. This duopoly tempers price competition but imposes high entry barriers for newcomers. The strategy revolves around scaling joint-venture technology, securing parts through barter, and upgrading platforms to meet evolving safety and emission regulations.

Capacity expansion plans include a 150,000-unit Renault facility and localized assembly of Mercedes-Benz Actros trucks. Domestic firms explore vertical integration for key components to cut FX exposure, while barter deals trading pistachios for electronics substitute conventional import finance. White-space opportunities in electric vehicles and premium SUVs attract smaller players such as Bahman Group, which leverage CKD kits from Chinese partners.

Ride-hailing giant Snapp exerts downstream influence, potentially shaping OEM fleet specifications. The Iranian vehicle market could see consolidation as smaller assemblers struggle with currency volatility, compliance expenses, and technology gaps. In parallel, export ambitions to neighboring markets hinge on meeting regional homologation standards, for which international partnerships remain crucial.

Iran Vehicles Industry Leaders

  1. Iran Khodro

  2. SAIPA Group

  3. Pars Khodro

  4. Bahman Group

  5. Kerman Motor

  6. *Disclaimer: Major Players sorted in no particular order
Iran Vehicles Market Concentration
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Recent Industry Developments

  • April 2025: AvtoVAZ announced localization plans to assemble the latest Lada model in Iran, aiming to expand exports to Iran, Kazakhstan, and Vietnam.
  • July 2024: Pars Khodro unveiled its first full electric hatchback, a rebadged Leapmotor T03, offering 107 hp and a 403 km NEDC range.
  • April 2024: MAPNA Group confirmed construction of 20 EV charging stations nationwide to underpin the rollout of 100,000 electric taxis.

Table of Contents for Iran Vehicles Industry Report

1. Introduction

  • 1.1 Study Assumptions and Market Definition
  • 1.2 Scope of the Study

2. Research Methodology

3. Executive Summary

4. Market Landscape

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 Government push for CNG-compatible powertrains
    • 4.2.2 Re-opening of selected JVs after 2023 sanctions waivers
    • 4.2.3 Subsidy-backed demand for small passenger cars
    • 4.2.4 Automakers' barter trade unlocking production lines
    • 4.2.5 Ride-hailing fleets driving LCV demand
    • 4.2.6 Military demand for locally-armoured pickups
  • 4.3 Market Restraints
    • 4.3.1 FX-driven parts import shortages
    • 4.3.2 Chronic currency depreciation inflating prices
    • 4.3.3 Power-grid shortfalls delaying EV charging rollout
    • 4.3.4 Pistachio-price backlash vs barter schemes
  • 4.4 Value / Supply-Chain Analysis
  • 4.5 Regulatory Landscape
  • 4.6 Technological Outlook
  • 4.7 Porter's Five Forces Analysis
    • 4.7.1 Threat of New Entrants
    • 4.7.2 Bargaining Power of Buyers
    • 4.7.3 Bargaining Power of Suppliers
    • 4.7.4 Threat of Substitutes
    • 4.7.5 Intensity of Competitive Rivalry

5. Market Size and Growth Forecasts (Value in USD and Volume in Units)

  • 5.1 By Vehicle Type
    • 5.1.1 Passenger Cars
    • 5.1.1.1 Hatchback
    • 5.1.1.2 Sedan
    • 5.1.1.3 Sport Utility Vehicle
    • 5.1.1.4 Multi-Purpose Vehicle
    • 5.1.2 Light Commercial Vehicles
    • 5.1.3 Medium and Heavy Commercial Vehicles
    • 5.1.4 Buses and Coaches
  • 5.2 By Fuel Type
    • 5.2.1 Gasoline
    • 5.2.2 Diesel
    • 5.2.3 Hybrid Electric
    • 5.2.4 Battery Electric
    • 5.2.5 Other
  • 5.3 By Ownership
    • 5.3.1 Domestic Brands
    • 5.3.2 Imported Brands
  • 5.4 By Customer Type
    • 5.4.1 Individual Consumers
    • 5.4.2 Fleet and Commercial Operators
    • 5.4.3 Government and Defense

6. Competitive Landscape

  • 6.1 Market Concentration
  • 6.2 Strategic Moves
  • 6.3 Market Share Analysis
  • 6.4 Company Profiles (Includes Global Level Overview, Market Level Overview, Core Segments, Financials as Available, Strategic Information, Market Rank/Share for Key Companies, Products and Services, SWOT Analysis, and Recent Developments)
    • 6.4.1 Iran Khodro
    • 6.4.2 SAIPA Group
    • 6.4.3 Bahman Group
    • 6.4.4 Kerman Motor
    • 6.4.5 Chery (MVM)
    • 6.4.6 Hyundai Motor
    • 6.4.7 Kia Corporation
    • 6.4.8 Toyota Motor
    • 6.4.9 Renault Pars
    • 6.4.10 Nissan Motor
    • 6.4.11 Dongfeng Motor
    • 6.4.12 AMICO

7. Market Opportunities and Future Outlook

  • 7.1 White-space and Unmet-Need Assessment
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Iran Vehicles Market Report Scope

A vehicle is a machine that transports people or cargo from one place to the desired location. The Iranian automotive industry is focused on passenger and commercial vehicles.

The Iranian automotive industry market is segmented by vehicle type and fuel type. By vehicle type, the market is segmented into passenger cars and commercial vehicles. By fuel type, the market is segmented into IC engines and electric.

For each segment, the market sizing and forecast are done in terms of value (USD).

By Vehicle Type Passenger Cars Hatchback
Sedan
Sport Utility Vehicle
Multi-Purpose Vehicle
Light Commercial Vehicles
Medium and Heavy Commercial Vehicles
Buses and Coaches
By Fuel Type Gasoline
Diesel
Hybrid Electric
Battery Electric
Other
By Ownership Domestic Brands
Imported Brands
By Customer Type Individual Consumers
Fleet and Commercial Operators
Government and Defense
By Vehicle Type
Passenger Cars Hatchback
Sedan
Sport Utility Vehicle
Multi-Purpose Vehicle
Light Commercial Vehicles
Medium and Heavy Commercial Vehicles
Buses and Coaches
By Fuel Type
Gasoline
Diesel
Hybrid Electric
Battery Electric
Other
By Ownership
Domestic Brands
Imported Brands
By Customer Type
Individual Consumers
Fleet and Commercial Operators
Government and Defense
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Key Questions Answered in the Report

What is the current size of the Iran automotive market?

The Iran automotive market stands at USD 41.57 billion in 2025 and is projected to grow to USD 54.51 billion by 2030.

Which companies dominate the Iran automotive market?

Iran Khodro and SAIPA collectively hold nearly 80% of total sales, establishing a duopoly structure.

How fast are electric vehicles growing in Iran?

Battery electric vehicles are forecast to register a 17.38% CAGR from 2025 to 2030 as government taxi electrification programmes expand.

Why is CNG important to Iran’s automotive strategy?

CNG leverages Iran’s vast natural-gas reserves, reduces gasoline import pressure, and benefits from over 2,300 fueling stations nationwide.

What challenges restrain the market’s growth?

Foreign-exchange shortages limiting parts imports, chronic currency depreciation inflating production costs, and electricity-grid limits on EV charging capacity are key restraints.

Page last updated on: July 7, 2025

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