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Major rise expected in Iran’s auto output

27 June 2015 18:49

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Iran’s media reported on Saturday that the country’s auto industry could see a major rise in production of cars in 2015.

The media have quoted a survey by the Business Monitor International (BMI) as indicating that the production of cars in Iran will increase by 28 percent while assuming that Iran and the P5+1 group of countries will reach a final deal over the Iranian nuclear energy program.

Iran and P5+1 – the five permanent members of the Security Council plus Germany – are currently engaged in talks in Vienna over the final text of a potential deal.

They face a self-declared deadline of June 30 to reach a deal that envisages the removal of certain economic sanctions against Iran in return for the country’s efforts to restrict certain aspects of its nuclear energy activities.

Nevertheless, both sides have already emphasized that talks can continue beyond the deadline until all issues are resolved and a deal is reached.

The BMI has added in its survey that the final Iran deal – if ever reached – will play a crucial role in the development of Iran’s auto industry.

This, it said, will be materialized through enabling Iranian car manufacturers to have access to foreign producers of auto parts.

Iran’s total auto output presently stands at 1.4 million cars and BMI said in its survey that this could increase to above 2 million cars by 2020.

The survey also said the recent projects in Iran for production of cars through Semi Knocked Down (SKD) and Complete Knocked Down (CKD) as well as the authorization to export cars to Iran – in light of the anticipated success of Iran-P5+1 nuclear talks – could lead to an increase of 35 percent in the country’s auto sales.

Several new brands are on their way to the Iranian auto market, the BMI said. This, together with an anticipated rise in purchases of cars in Iran after 2016 could eventually create a market of about 2.5 million cars in the country before 2019.

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