After oil and gas, the automotive industry is Iran’s biggest, accounting for about 10% of GDP and employing about 4% of the labor force. There was a boom in local car manufacturing between 2000 and 2013, driven by high import duties and a growing middle class. The Iranian automobile industry makes up for 1.2% of world production, and currently holds rank 18 to 20.


Iran also looks at its automotive industry as an important sector for exporting its products to neighboring countries. In 2012 Iran exported 520 million USD worth of automobiles and car components. The situation for car and component manufacturers worsened in the following years, leading to a diminishing export value by 2013 to 263 million USD. In 2014 Iran’s share of exporting automobiles and car components was announced to be at 243 million USD. There are several reasons for the drop, however, experts concur that the key reasons are low quality and at the same time a high price.


Currently the Iranian automobile import market is ranked on 75th place worldwide, making up for less than a percent of the global automobile and component importing market share. In 2010, its market share was 0.2 percent with a total value of 2.5 billion USD. During 2011 the market share did not change, however, the total value of it increased to 2.9 billion USD.


Within Iran’s 2025 overall economic vision the particular automotive industry vision is defined as “Reaching the number one ranking in the automotive industry of the region, 5th ranking in Asia and 11th ranking in the world by focusing on competitive development based on technological advancement.”

Although Iran´s vision for 2025 aims for a production of 3 million units, according to current trends and the assumption that no further sanctions will be imposed on Iran within the next ten years, it can be expected that Iran will produce up to 2 million PV by 2025 under the condition that the average growth rate will be the same as it was before 2011. Some of the most significant shortcomings of the Iranian automotive industry include insufficient financial access, poor financial statements in general, and low product quality for a high price.


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