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Iran Vehicle Market - Growth, Trends and Forecasts (2019 - 2024)

  • ID: 4828261
  • Report
  • June 2019
  • Region: Iran
  • 75 pages
  • Mordor Intelligence


  • Chery Automobile
  • Great Wall Motor Co. Ltd.
  • Groupe PSA
  • Iran Khodro
  • Lifan Industry Group
  • Nissan
  • MORE
Market Overview

The Iranian vehicle market is expected to witness a CAGR of ~4%, during the forecast period, 2019-2024.

Iran has faced economic difficulties due to the sanctions imposed upon it; but still, the country has maintained a per capita income of USD 16,463, which puts it into the category of upper-middle-income nations and favorable nations for the automobile industry. The country also has a favorable demographic structure needed for its fast-paced growth.

The automobile industry is vital for Iran as it is the second-largest industry after oil & gas, and contributes around 10% to the GDP. 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.

The massive currency depreciation experienced in 2012-2013, had a huge impact on the local automobile industry. As a result, production fell under 1 million units for the first time since 2007. However, the market recovered considerably since then and is expected to show modest growth. With the opening up of the markets, the government will be forced to remove the subsidies given to manufacturers, and that would affect the profitability of the local manufacturers. Despite sanctions, Iran has become a powerhouse in automobile manufacturing and represents one of the best markets to invest in for global players, as it has the potential to grow massively once the sanctions are lifted.

Scope of the Report

The Iranian vehicle market has been segmented by vehicle type.

Key Market Trends

Increasing Production of Automobiles

The automotive industry is the second largest industry in Iran after oil and gas and contributes around 10% to the GDP. In 2016, the 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 if no sanctions are imposed on the country. In 2018, Iran produced more than 1.09 million cars.

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 by nearly 151%. Additionally, a couple of years back, the Islamic Republic presented certificates to foreign car manufacturers willing to open sales branches in Iran. Around 40 foreign automotive manufacturers have already obtained the certificates, and the number is projected to grow over the forecast period. Peugeot partnered with the local leading company, Iran Khodro, to manufacture passenger vehicles. The partnership, which signed a EUR 400 million (USD 430 million) deal in June 2016, expects to produce 200,000 cars in Iran by 2018.

The automotive industry in the country is expected to grow over the forecast period, as foreign manufacturers are striking partnership deals with the local carmakers. In February 2018, Renault sold nearly 15,200 cars in Iran, which is an increase of 175% from the fiscal year 2017.

Passenger Cars Hold Major Share in the Market

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.

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 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.

The sanctions gave birth to domestic companies, such as IKCO and SAIPA, which have a major share of passenger vehicle sales in the country. At the time of implementation of the sanctions, the percentage share of the indigenous companies of the overall vehicle production reached as high as 85%. However, if the sanctions are relaxed, more international companies are expected to introduce the latest vehicles in the country, which would further drive the market.

Competitive Landscape

The Iran vehicle market is a consolidated one. The major players of the Iranian automotive 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 companies in this market. In October 2017, the Iran Khodro Industrial Group (IKCO) signed a new cooperation agreement with Hyundai PowerTech to meet the domestic and foreign market needs.

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Note: Product cover images may vary from those shown


  • Chery Automobile
  • Great Wall Motor Co. Ltd.
  • Groupe PSA
  • Iran Khodro
  • Lifan Industry Group
  • Nissan
  • MORE
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study



4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness - Porter's Five Force Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry

5.1 By Vehicle Type
5.1.1 Passenger Vehicles
5.1.2 Commercial Vehicles

6.1 Vendor Market Share**
6.2 Company Profiles
6.2.1 Renault
6.2.2 Nissan
6.2.3 Groupe PSA
6.2.4 Iran Khodro
6.2.5 SAIPA Group
6.2.6 Hyundai Kia Automotive Group
6.2.7 Toyota Group
6.2.8 Chery Automobile
6.2.9 Brilliance Automobile Group
6.2.10 Lifan Industry Group
6.2.11 Volkswagen Group
6.2.12 Great Wall Motor Co. Ltd.

Note: Product cover images may vary from those shown
  • Renault
  • Nissan
  • Groupe PSA
  • Iran Khodro
  • SAIPA Group
  • Hyundai Kia Automotive Group
  • Toyota Group
  • Chery Automobile
  • Brilliance Automobile Group
  • Lifan Industry Group
  • Volkswagen Group
  • Great Wall Motor Co. Ltd.
Note: Product cover images may vary from those shown