Iran Automotive Industry Rebounding?

Khodrocar – Iran’s GDP is very dependent on Oil and after that the most effective industry in the country’s economic growth is the automotive industry which had a good growth after the sanction removals.

Statistics show that automotive industry have 21 percent of share in country’s added value and 4 percent of share in GDP. The value share of the automotive industry relative to the total production of the industrial sector reached from 23.4% in the year 2004 to 5.4% in the year 2014 and that was the time when the sanctions was the country’s big problem. However, after the sanction removal this industry started to grow and helped the country’s economic growth.

Last month, Donald Trump decided to leave Iran’s nuclear deal and this means that the sanctions will return soon.

What are the consequences of this decision on Iran’s automotive industry?

Shahram Azadi, an automotive industry expert, told Khodrocar regarding the issue: "If the European side does not fulfill its obligations and on the other side, Iran leaves the JCPOA, it is expected that the car industry move backwards.”

He emphasizes: "It is very illogical to expect that all parts of the auto industry in the country will be supplied from the domestic companies. Even the most developed countries like Germany and United States, supply their vehicle parts from the global manufacturers.

Azadi believes that United States move will increase the costs and this will damage Iran’s automotive industry seriously. It can not be denied that with the new conditions, the growth automobile industry will slow down.

How About Car Export?
One of the ways that automakers and countries make money for their industry is exporting products to other countries. Is this possible for the Iranian automotive industry?

Shahram Azadi tells Khodrocar about this issue: "We are able to export limited amount of cars with old platforms to the countries like Iraq and Syria because they have very tough Standards. However, If the new products of Iran Khodro and Saipa which are being developed and built in the country, will be at a high quality level, we can hope to create a fairly good competition with the export of these vehicles in the region.”

Khodrocar – It seems that the united states are very serious about the implementation of new sanctions. Considering the situation, Iran’s automotive industry which is one of the most important industries in the country after Oil, will be damaged seriously and maybe it will turn back to those miserable days.


Khodrocar Reporter and Translator: Maziyar Jafarieh