Automotive industry in Iran

Iran’s automotive industry is the second most active industry of the country, after its oil and gas industry, accounting for 10% of Iran's GDP and 4% of the workforce (700,000 persons).

Iran developed a significant automotive industry with annual production of up to 200 thousand units under the Shah's regime. But after the Islamic revolution of 1979 production drastically decreased. Since the early 2000s, automobile production in Iran has grown exponentially. Iran's automobile production crossed the 1 million mark in 2007/2008. Today, Iran is the 18th largest automaker in the world and one of the largest in Asia, with annual production of more than 1.6 million. In 2009 Iran ranked fifth in car production growth standing next to China, Taiwan, Romania and India. According to OICA statistics, production dropped dramatically to under 750,000 automobiles and commercial vehicles in 2013.

As of 2001, there were 13 public and privately owned automakers in Iran, of which two—Iran Khodro and Saipa—accounted for 94% of the total domestic production. Iran Khodro, which produced the most prevalent car brand in the country—the Peykan, which has been replaced in 2005 by the Samand—, was still the larger with 61% of the market in 2001, while Saipa contributed 33% of Iran’s total production in the same year. Iran Khodro is one of the largest car manufacturers in Asia. It has established joint-ventures with foreign partners on 4 continents.

The Iranian manufacturers currently produce six different types of vehicle, including passenger cars, 4WD, trucks, buses, minibuses, and pickup trucks. The sector directly employs about 500,000 people (roughly 2.3% of the workforce), and many more in related industries. About 75% of local output is passenger cars, with pick-ups the next largest category, accounting for around 15%.

In the 1960s, lacking the technical know-how and unable to produce its own automobiles, Iran invited western firms in order to start a domestic automobile industry. Since then, Iran has developed its domestic industry where it can design and assemble cars on its own, including a new car factory in Kashan. The average operating margin of the five major Iranian automakers dropped by 1% from 13% to 12% in 2011. The seven development phases of Iran’s automotive industry have been:

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Wikipedia