Iran's automotive market

Iran Khodro Samand: Iran’s national car.

When you think of emerging automotive markets, most people automatically think of China or India. There's a new contender in the ring, however, as a lifting of sanctions might soon grant Iran the same amount of attention as India and China as far as investments in the automotive manufacturing sector goes.

The country of around 77 million present a big opportunity to foreign car-makers interested in untapped markets to sell their wares to, but due to political strife, huge restrictions on foreign involvement imposed by the Islamic Republic, and economic sanctions placed on it have pretty much killed the scope for manufacturers over the past decade.

French carmakers Renault and Peugeot-Citroen enjoyed a huge popularity in Iran throughout the 90's, but the turn of the decade and the turmoil erupting in the Middle East forced them to pull out of Iran altogether. The deals and manufacturing method sharing stayed in place, however, and local manufacturers like Iran Khodro and Saipa were left with an open playing field. What ensued in the decade after were hashed and rehashed 90's models of French cars, sold as local products and exported to countries like Russia and Syria.

Iran's nuclear program forced world powers to place crippling sanctions on the country, and now that an understanding of sorts has been reached and sanctions seem to be lifting, global automakers are seeking a return to this lucrative market. Iran Khodro, the country's largest vehicle manufacturer (with their impossibly 90's French car copy and best selling “national car”, the Samand), seem reluctant to head back into a partnership with their old benefactors, Peugeot-Citroen, because if its one thing Iranians hate, its people who quit on their country. Which, in today's world, seems to be pretty much everyone.

Will this self-dependence and rigidity pay-off in the long run for Iran's automotive industry? The manufacturers seem to be doing great in the domestic market: Iran Khodro produced 600,000 units in 2011 alone. In a world where Chinese copycats can sell by the boatloads because they're cheaper and offer the basic motoring need of going from point A to B, there's a chance that Iran might be the surprise contender in the automotive world of tomorrow.