Iran to become a hub for automotive manufacturing

Publish Date: 13 March 2016

Rouhani-unveils-2-products-of-Iranian-auto-makers-600x360Iran’s president Tuesday called for foreign partnerships to boost the country’s car industry and said the sector must be privatized to improve its competitiveness.

Tehran, February 29, The Iran Project – Iran could become a hub for automotive production in the region given its capacities in this industry, director of the International Organization of Motor Vehicle Manufacturers (OICA) says during the 3rd Automotive Industry International Conference which is underway in Tehran.

automotive manufacturing
Attended by 363 Iranian and 137 international automakers, the third Iran Automotive manufacturing International Conference kicked off in Tehran on Monday. During his speech in opening ceremony of the conference, Yong Geun Kim the director of the International Organization of Motor Vehicle Manufacturers noted Iran’s capacities in automotive industry, predicting that Iran’s can turn into a hub for car manufacturing in the region.
Under the new condition (removal of the West-led sanctions against Iranian economy) Iran is moving in the appropriate way, he said; adding that with a population of 80 million Iran is a big market in the region.

Automotive manufacturing

The automobile industry, the biggest non-oil sector of the Iranian economy, constituting around 10 percent of gross domestic product (GDP), boomed over the decade ending in 2011 due to government support and the dearth of international competitors in the domestic market.

Iran ranks 18th on the list of the world’s top auto manufacturers, according to the International Organization of Motor Vehicle Manufacturers (OICA).

Global automakers are in a race for new business in Iran following the signing of a nuclear accord between Iran and world powers on July 14, 2015, which ends economic sanctions against Iran in exchange for restrictions on its nuclear program.  Speaking briefly on the background and missions of the organization, he highlighted Iran as an outstanding car maker in the Middle East whose economy is based on this industry after the oil and gas.
Elsewhere in this ceremony, President of Organization for Investment , Economic and Technical Assistance of Iran, Mohammad Khazaei as another keynote speaker underlined Iran’s current approach of joint and long term investment, stating that a new horizon has opened ahead of Iran and industrialized countries in which the international cooperation will remarkably enhances.
During the opening ceremony of the conference, Iran signed four agreements with Sweden, Turkey and India in manufacturing, tooling and scientific cooperation.

Iran seeks auto industry partnerships

iran automotive manufacturingIran’s president Tuesday called for foreign partnerships to boost the country’s car industry and said the sector must be privatized to improve its competitiveness. President Hassan Rouhani told a car industry conference in a nationally broadcast speech that partnerships with international automotive manufacturing companies offer quick way to improve the industry’s technology, safety and increase automotive manufacturing in Iran.

“There is a shortcut … We have to start partnerships with prominent world automotive manufacturing companies. We will reach to the optimum point in technology, protecting the environment, saving energy and safety,” Rouhani said. He said partnerships with foreign automotive manufacturing companies will serve the best interests of all sides, and increasing the competitiveness of the local market can only help strengthen the industry. But he also warned that plan would mean removing government protections of the domestic car market such as prohibitions or heavy tariffs on imported vehicles. Rouhani said the days of the state-sponsored auto monopoly must end. Iran’s 50-year-old car industry produces about 900,000 cars annually. The country hopes to increase the number to 3 million by 2025.

France’s Peugeot-Citroen last month announced a joint venture with automaker Iran Khodro to make 200,000 cars a year outside Tehran. The French car-maker was heavily involved in Iran’s auto industry before nuclear-related sanctions were imposed. In Iran, a country of 80 million people, road accidents annually claim nearly 17,000 lives, which many blame on lax safety standards.