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Iran automobile market and truck parts business opportunities in Iran.


Key words: Iran trucks, Iran cars, truck parts, Iran imports, howo parts, Iran business

The Iranian automobile industry is the largest industry in Iran besides the petrochemical industry. Its contribution to Iran's GDP and employment are extremely important.
 
The Iranian automotive industry is different from most people’s knowledge.
 
Iran can produce cars and trucks very early, and Iran’s car production and car ownership are relatively high in the world.


Iran truck
 
Iran mainly began to assemble western cars and trucks to develop local production platforms from the 1960s, and imported cars and trucks from the west.
 
According to data from the International Automobile Manufacturers Association, Iran produced 1.16 million cars in 2016, including 1.07 million passenger cars and 90,000 trucks, an increase of 18.6% year-on-year, and ranked 16th in the world in terms of output.
 
From 2011 to 2015, Iran ranked 13th, 18th, 20th, 18th, and 16th in the world in terms of automobile production.
 
Large market holdings
 
In the automotive industry, there is an important indicator called the thousand-person car ownership. In 2018, Iran's thousand-person car ownership was 256, ranking 64th in the world.
 
Horizontal comparison. In 2016, after years of rapid growth in the automotive market, China's thousand-person car ownership was only 154, ranking 74th in the world.
 
Relatively complete automobile manufacturing system
 
Leading companies in the Iranian automotive industry, like State-owned enterprises include IKCO, and Saipa Corp, and private enterprises mainly include Korman Group and Bahaman Group.
 
In addition to normal manufacturing companies, Iran’s car and truck spare parts manufacturing system is relatively complete, and many parts can be produced in Iran, such as batteries, car bodies, rubber parts, brake pads, automotive glass, and so on.
 
However, their R&D capabilities is relatively weak and the small size of the automotive market cannot support the R&D investment of Iranian companies. Therefore, they mainly cooperate with European, Japanese, South Korean, and Chinese companies, and assemble and manufacture locally by introducing models from other companies.
 
The Iranian Ministry of Industry, Mining and Trade has stated many times that it will continue to support the development of the automotive industry. The chairman or general manager of the above-mentioned leading enterprises of the automobile industry are mostly senior officials of the Ministry of Industry and Mining Trade. They have the ability to influence the government in taxation, technology introduction, investment cooperation and loans policies and support.
 
At present, more than 20 Chinese auto companies have cooperated with Iran in the form of parts and vehicle trade, parts assembly and production, production line construction cooperation, and investment and factory establishment.

Iran truck -2
 
Opportunities for auto parts
 
Under the current background of Iran's resistance-oriented economic policy, the Iranian government has begun to restrict imports to some Iranian products that can be produced locally. In this way, it encourages and supports local production.
 
In terms of specific operations, Iranian importers first need to get the proforma invoice to the Iranian Customs and the Ministry of Industry, Mining and Trade for the record when applying for imported products.
 
If the Iranian Customs and the Ministry of Industry, Mining and Trade discover that the products imported by the importer can be produced locally in Iran, they will not be allowed to register this import list.
 
For example, a trading company is importing truck parts for Hyundai. On the list there are some brake pads for these trucks. However, some Iranian companies claim that they can produce brake pads for Hyundai trucks, so the import of Hyundai truck parts will not be allowed.
 
In this case, if some truck parts companies can invest in Iran, this is a good market opportunities.
 
First of all, the Iranian automotive market has huge reserves, and the demand for automotive spare parts is huge every year.
 
Second, this huge demand has a serious supply gap. Due to sanctions and other reasons, there is a huge shortage of auto spare parts supplies from Europe, Japan, South Korea and China.
 
Third, the Iranian market has the ability to cover neighboring Iraq and Syrian markets.
 
What auto parts have a chance in Iran?
 
This requires some rigorous market research, but in general, it can be considered from several factors:
 
Consumption large, certain technological content, certain investment threshold, and there are no or weak local competitive spare parts supply. For example, aluminum wheels, tires, batteries, etc.
 
Of course, when investing in Iran, we must pay great attention to controlling risks. The greater risk lies in the management and control of the Rial exchange rate risk. Due to sanctions, Iran’s oil exports have been restricted, so Iran’s domestic foreign exchange has been in short supply and its currency has depreciated significantly. However, some people believe that the possibility of further depreciation is extremely low!
 
In any case, Iran has more than 20 million cars, and their cars have no scrap years, and the demand for auto parts is huge.