Iran auto makers to boost exports to 30%
IKCO and other Iran producers to significantly ramp up production following the easing of sanctions
Iran auto makers are predicted to boost car exports in the region to 30% within the next 10 years.
“According to the plans, one-third of the cars produced in Iran will be exported to overseas markets,” said Iranian Minister of Industry, Mine and Trade Mohammad Reza Nematzadeh.
“At present, Iranian car manufacturers produce up to 1.6 million cars annually, and in talks with auto companies it has already been emphasized that 30% of the cars produced in Iran will be exported overseas [within 10 years].”
In recent months, leading Iranian car manufacturer, Iran Khodro Industrial Group (IKCO), has been in talks with a number of large auto makers, including Peugeot, Renault, Daimler and Volkswagen.
In most instances, the Iranians are looking for local joint ventures with an emphasis on local assembly with a long-term view to developing standalone manufacturing capability within the country.
The automobile industry is already Iran’s biggest non-oil sector, accounting for near 10% of gross domestic product (GDP), and IKCO and Saipa account for more than 90% of the domestic production.
Sanctions on Iran hit the automotive industry hard, cutting production from 1.6 million vehicles in 2011 to just 600,000 vehicles, but 2014 statistics from the International Organization of Motor Vehicle Manufacturers (OICA) indicate that production increased by 46.7% over a 12-month period.
However, IKCO still exported 6,000 vehicles or 2% of its total production over the last 12 months, with the majority of it going to Iraq, where the company has had a long-term presence.
Latest data also shows that Iran ranks 18th on the list of the world’s top auto manufacturers.