Iran Autos Report Q4 2012

Business Monitor International
October 26, 2012
44 Pages - SKU: BMI4893205
Countries covered: Iran

Last quarter BMI revised down its production and sales estimates for Iran’s autos industry – despite totalvehicle output by Iran’s automakers increasing 2.4% year-on-year (y-o-y) to 1.64mn in the Iranian yearended March 19 2012 – owing to the withdrawal of many international companies from the country in thewake of global sanctions against its nuclear efforts,Iran’s auto industry continues to show mixed messages. As such, we have kept our sales and productionforecasts unchanged this quarter.

Iranian carmakers exported 21,985 cars worth US$123mn in the first four months of the Iranian calendaryear starting March 20. Key export markets were Iraq, Afghanistan, and Ukraine. The country plans toproduce at least 3mn cars and export 1mn cars by 2025. Around 1.6mn cars were produced and 55,000cars exported in the previous calendar year.

According to RFE/RL in August, Iran’s leading domestic firm Iran Khodro (IKCO) announced itexpects sales and exports to its main markets in Russia, the Middle East, South America and Africa to'boom' 45%. This is down to interest in its domestically made and designed ‘national' car, the Runa,unveiled in 2009. IKCO is also confident about its revamped sedan model, the Samand, which is exportedto Russia via an assembly plant in Belarus and also made in Iraq. IKCO intends to adopt new marketingstrategies in an effort to export 16% of its output in the coming three years and enhance its global marketshare. IKCO's ambitious export plans could be buoyed by the rapid development of alternative fuelvehicles, which may find a niche in markets where there is demand for green cars.

Despite this bullishness, sanctions are hitting Iran's domestic autos industry, which is the second largestsector in Iran, behind the oil and gas sector.

In July the Industry, Mines, and Commerce Ministry announced that overall domestic auto output fell36% in the first quarter of the Iranian year (March 21 to June 20) because of ‘lack of money’ to buyassembly parts. According to Bloomberg Business Week, Iran's Donya-e Eqtesad newspaper quotedMohammad Reza Najafimanesh, a union official, saying that Iran had to produce 2mn cars in the currentfinancial year, but was likely to make only around 1.5mn, which would amount to a 25% fall. The Tehrancar parts dealer Nasser Ahmadi said its sales have fallen 60%.

Iran’s industry, mine and trade minister Mehdi Ghazanfari has said IKCO and Iran's other major carmanufacturer Saipa are struggling to pay their debts to domestic parts makers. The ministry has given thefirms loans totalling 500 bn toumans to avoid unemployment for hundreds of thousands of workers inauto parts manufacturing plants. Ghazanfari warned around two million jobs were on the line if the autoparts manufacturing sector, and consequently car manufacturing as a whole, closed down. The MehrNews Agency says hundreds of car industry jobs have already been slashed across Iran.

The problems directly relate to PSA Peugeot Citroen's decision in March, following its tie-up withGeneral Motors Company, to stop supplying parts and assembly kits to Iran. The French firm had madeup around 40% of Iran's auto output through its tie-up with IKCO. In May, Italian carmaker Fiat alsosuspended sales to Iran, saying it would support 'the efforts of international diplomacy to find adiplomatic solution to the issues relating to Iran.'

The US lobby group United Against Nuclear Iran (UANI), which lobbied for an end to Peugeot'sinvolvement in Iran, is continuing its efforts to get foreign automakers out of Iran. It says that Isuzu, KiaMotors, Mazda Motor, Mitsubishi Motors, Nissan Motor, Peugeot, Renault, Suzuki Motor, ToyotaMotor and Volvo either export to the Islamic Republic or have manufacturing agreements with carcompanies controlled by the regime.

UANI launched its ‘Auto Campaign’ in March 2012, citing a BMI report into how the enforcement ofeconomic sanctions on Iran has resulted in the country's government prioritising the development of astrong domestic auto industry. UANI says in recent months, Hyundai Motor and Porsche have endedtheir business in Iran in response to its campaigns.

More Automotive Manufacturing reports by Business Monitor International

Serbia Autos Report - Q4 2014 by Business Monitor International
Serbia Autos Report - Q4 2014We expect the floods, which hit Serbia in May, to impact the new car market negatively in 2014 but ...
Qatar Autos Report - Q4 2014 by Business Monitor International
Qatar Autos Report - Q4 2014BMI View: This quarter, we maintain our forecast for nearly 100% growth in new vehicle sales over the2015-2018 period, ...
Oman Autos Report - Q4 2014 by Business Monitor International
Oman Autos Report - Q4 2014This quarter, BMI has revised down its 2014 new vehicle sales forecasts for Oman, following a first half of2014 ...
Netherlands Autos Report - Q4 2014 by Business Monitor International
Netherlands Autos Report - Q4 2014BMI maintains a bearish outlook on autos sales in the Netherlands in 2014, forecasting a 2.7% drop involumes over ...
See all reports like this >>

More Iran Automotive Manufacturing reports

Seat Market in Iran to 2018 : Market Size, Trends, and Forecasts by Global Research & Data Services
Seat Market in Iran to 2018 - Market Size, Trends, and ForecastsThis industry report offers the most up-to-date market data on the actual market situation, ...
Iran Autos: Report Q3 2014 by Business Monitor International
Iran Autos: Report Q3 2014The medium-term outlook for Iranian auto production remains cautiously optimistic, reflecting thetemporary deal reached between the US and major powers over ...
Fluid Power Cylinders in Iran by Gobi International
This report covers market demand for fluid power cylinders. Data for the car, bus, LVC (pickup truck and van) and heavy truck markets are consolidated. ...
Rubber & Plastic Hose & Belting in Iran by Gobi International
Rubber & Plastic Hose & Belting in IranThis report covers market demand for rubber and plastic hose and belting. Data for the car, bus, LVC ...
See all reports like this >>

More Iran reports

D&B Country Report: The Islamic Republic of Iran by Dun & Bradstreet Inc.
D&B Country Report. Comprehensive information for evaluating risks and opportunities when trading or investing in this country. Providing critical information and analysis on ...
See all reports like this >>



    Report with 3 quarterly updates  USD 1,175  
US: 800.298.5699
Int'l: +1.240.747.3093

Share this report

    Other tasks

    Join Alert Me now!
    Receive bi-weekly email alerts on new market research

    Sign up today!