Automotive Industry in Iran Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Iran Vehicle Market is segmented by Vehicle Type (Passenger Vehicles and Commercial Vehicles) and Fuel Type (ICE Engine and Electric Vehicle). The Report Offers the Market Size and Forecast of the Iran Vehicle Market in value (USD billion) for the above-mentioned segments.

Iran Vehicles Market Size

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Iran Vehicle Market Forecast
Study Period 2019 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 37.94 Billion
Market Size (2029) USD 59.93 Billion
CAGR (2024 - 2029) 9.57 %
Market Concentration High

Major Players

Iran Vehicles Market

*Disclaimer: Major Players sorted in no particular order


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Iran Vehicles Market Analysis

The Iran Vehicles Market size is estimated at USD 37.94 billion in 2024, and is expected to reach USD 59.93 billion by 2029, growing at a CAGR of 9.57% during the forecast period (2024-2029).

The automobile industry contributes around 10% to the GDP of Iran. The total domestic production in Iran is dominated by two manufacturers, namely Iran Khodro and SAIPA, which account for more than 90% of the total domestic production. Iran's automobile industry is dominated by the passenger car segment, and it accounts for roughly three-fourths of the total market.

During COVID-19, the vehicle market witnessed a steady decline in Iran after the supply chain and imports & exports were muted amid the virus spread. In addition, the complete auto sector production was halted which exhibited a steep decline in vehicle sales during the year. Although, as time passed, 2021 was the market as the year of transition where the complete auto sector of Iran was under development of new reforms suggested by its ministries. According to OICA , Iranian automakers nearly produced 894,298 vehicles during the period of 2021 to register two percent increase in its production compared to 2020.

The government of Iran has introduced 9 strategic projects in the country which will provide an equivalent pace to the industry's rapid growth. Moreover, the projects are much inclined towards strengthening the OEM and auto part suppliers in Iran to maintain the structure of the automotive industry and to achieve production targets till 2025 end.

Considering these factors, and government's forefront in upbringing the development in Iran's auto sectors, vehicle sales are expected to remain fruitful during the longer-term forecast period.

Iran Vehicles Market Trends

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

Passenger Car Segment to Witness Highest Growth

The passenger cars segment holds the largest market share in the Iranian automotive industry. 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 volatility in the automotive industry with the implementation of the sanctions.

Iranian car manufacturers alone accounted for around 2.2% of the country's overall economic growth. The automotive industry is projected to form at least 4% of Iran's economic growth by 2025. In addition, Iran's car production during 2021 has even surpassed many industrialized countries including Italy with 795,000 units, Poland with 439,000 units, South Africa with 499,000 units, Portugal with 289,000 units, Belgium with 261,000 units, Taiwan with 265,000 units, Austria with 136,000 units, Egypt with 23,000 units and Finland with 93,000 units. This makes the Iran automotive sector the most potential hotspot for car manufacturing during the coming years.

The Iranian car manufacturers have re-established their cooperation with European companies, such as Peugeot, Citroen, and Renault. As a result, the automotive industry has grown immensely over the years. On average domestic manufactured car costs USD 2500 whereas the imported car is being sold for almost 8000 USD, which is giving a competitive advantage to the domestic market. The Iranian government is considering increasing import taxes to 70% from the already high 40% to encourage domestic production.

The sanctions concluded by Iran government has helped the domestic companies, such as IKCO and SAIPA, to emerge in the market, which have a major share of the passenger vehicle sales in the country. In addition, Iran government and OEM are expected to play most pivot role in driving the Iran passenger car segment in coming years. For instance, In July 2022, Iran, Turkey and Russia came under the joint car design and manufacturing. This tripartite cooperation would develop mutual growth vision for all three counties to robust the automotive car production in the countries.

Considering these factors and development, demand for passenger car is expected to witness high growth rate during the forecast period in Iran.


Electric Vehicles to Gain Traction in Coming Year

In context to zero carbon emission technologies, alternative fuel vehicles (AFV) offer significant energy sustainable transportation and came up as a potential innovation to address the issue. Hybrid electric vehicle (HEV), plug-in electric vehicle (PHEV), and battery electric vehicle (BEV) are the most common type of alternative fuel vehicles which either uses less or no fossil fuel.

Shifting customer preference towards electric vehicles is an evident sign for future decarbonization and simultaneously decisive for charging stations, although penetration of EVs is subjected to various attributes, including consumer behavior, infrastructure, and certain regional clusters. An increase in electric vehicle sales will proportionally fuel the demand for charging stations. Prominent players in the market have diagnosed the pinpoint of consumer sentiment and thus are focusing on catering to it by offering fast charging technologies across the country.

Eventually, the Iranian automotive industry became self-reliant and self-sufficient to supply for the demand within the country. The country had reached the potential to roll out electric vehicles. For instance:

  • In March 2022, Iranian automotive manufacturer KSJ Motors introduced an all-electric car named Oxygen in the Iran auto market. The company has offered these two passengers' all-electric vehicles at USD 10, 500 and further plans to produce 1,000 more units in the coming nine months tenure. The vehicle's energy consumption will be even less than 15 kilowatt hours (kWh) for every 100 kilometres with the vehicles a combined range of around 220 km per charge. Moreover, according to company's sources, KSJ Motors had sourced only 20% of vehicle parts needed for making the car outside of the Iran.
  • In March 2022, Iran Khodro's hybrid bus named as E-Atros was announced in the market. The newly offered bus is 12-meter in length and is suitable for inner-city use. In addition, the bus is powered with 350 kWh battery producing 470 horsepower and 3500 Nm torque.

Considering these factors and development, demand for electric vehicles is expected to penetrate the Iran's automotive sector in the forecast period.


Iran Vehicles Industry Overview

The Iranian vehicle market is consolidated. The major players of the Iranian vehicle market are Renault-Nissan Alliance, Brilliance Automobile Group, Chery Automobile, Hyundai Kia Automotive Group, Iran Khodro (IKCO), Lifan Industry (Group), Groupe PSA, SAIPA Group, Toyota Group, VW Group, and Great Wall Motor Company Ltd (GWM). Alliances and joint-ventures are the major strategies adopted by the companies in this market. The sactioned imposed over Russia during the Ukraine and War has favoured several key auto mekers operating in Iran to give favours to soutry for mutual growth cooperation. For instance:

In August 2022, SAIPA Corp which is Iran's second largest car manufacturer has joined hands with Russia's car manufacturer AvtoVaz for the supply of the Lada engine blocks to restart the production of the Renault model. In addition, under this deal, the SAIPA-produced Renault Logan, which is a rebadged car named as L90 Tondar, will be made with a Lada Largus engine.

Iran Vehicles Market Leaders

  1. Iran Khodro

  2. SAIPA Corp

  3. Groupe PSA

  4. Nissan

  5. Renault

*Disclaimer: Major Players sorted in no particular order

Iran Khodro, SAIPA Corp, Groupe PSA, Nissan, Renault
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Iran Vehicles Market News

In September 2022, Iran's largest car manufacturer IKCO has unveiled its all new electric car for a commercial launch which is expected in the March 2023. In addition, IKCO has alos planed to manufacture 5,000 units of Tara EV in the first year of production.

In August 2022, Iran's largest car maker Khodro unveiled its local crossover which is manufactured in Iran. The car has been manufactured in Tehran factory.

Iran Vehicles Market Report - Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's 5 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 (Market Size in Value USD Million)

    1. 5.1 By Vehicle Type

      1. 5.1.1 Passenger Vehicles

      2. 5.1.2 Commercial Vehicles

    2. 5.2 By Fuel Type

      1. 5.2.1 IC Engine

      2. 5.2.2 Electric


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Renault Pars

      2. 6.2.2 Nissan Motor Co., Ltd

      3. 6.2.3 Iran Khodro

      4. 6.2.4 SAIPA Group

      5. 6.2.5 Hyundai Kia Automotive Group

      6. 6.2.6 Toyota Group

      7. 6.2.7 Brilliance Automobile Group

      8. 6.2.8 Volkswagen Group

    3. *List Not Exhaustive

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Iran Vehicles Industry Segmentation

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

The Iran Vehicle market is segmented by vehicle type and fuel type. On the basis of vehicle type, the market is segmented into passenger cars and commercial vehicles and on the basis of fuel type, the market is segmented into IC engines and electric. For each segment, the market sizing and forecast have been done on basis of value (USD billion).

By Vehicle Type
Passenger Vehicles
Commercial Vehicles
By Fuel Type
IC Engine
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Iran Vehicles Market Research FAQs

The Iran Vehicles Market size is expected to reach USD 37.94 billion in 2024 and grow at a CAGR of 9.57% to reach USD 59.93 billion by 2029.

In 2024, the Iran Vehicles Market size is expected to reach USD 37.94 billion.

Iran Khodro, SAIPA Corp, Groupe PSA, Nissan and Renault are the major companies operating in the Iran Vehicles Market.

In 2023, the Iran Vehicles Market size was estimated at USD 34.63 billion. The report covers the Iran Vehicles Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Iran Vehicles Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Iran Automotive Industry Report

Statistics for the 2024 Iran Automotive market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Iran Automotive analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Automotive Industry in Iran Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)