Report Forecasts Bigger Share of Chinese Cars

Report Forecasts Bigger Share of Chinese Cars
Report Forecasts Bigger Share of Chinese Cars

A new report by Business Monitor Interational has reflected the changing environment in the Iranian auto industry and the rise of Chinese cars in the market in the second quarter of 2015.

Agreements with Chinese manufacturers bring new business partnerships with willing new companies, Business Monitor International said in its March report on Iran's automotive industry.

Further down the top 10 chart is the increasing market share being taken by the two Korean carmakers Hyundai and Kia as well as the presence of three Chinese carmakers (Chery, Geely and Lifan). In fourth place was France's Renault with 7.5% market share, according to the report.

In March 2014, Saipa signed a deal with Chinese automaker Chongqing Changan Automobile Co. to manufacture cars jointly, according to a report by ISNA. Under the agreement, two models will be manufactured by Saipa's subsidiary Saipa Kashan. This subsidiary has the capacity to make 180,000 cars a year.

Iranian vehicle production rose by 67.5% in 2014, to 1.09 million units, according to statistics from the International Organization of Motor Vehicle Manufacturers (OICA). Breaking down the headline figure, Iran produced 925,975 passenger cars and 164,871 commercial vehicles. This makes Iran the 18th largest auto producer in the world, BMI said.

The report stated that there remains strong demand for new vehicles from the Iranian population at present. As such, the potential for improved foreign relations between Iran and the West over the short to medium term has generated considerable interest from carmakers, none more so than French brands Renault and Peugeot.

It appears likely that Peugeot will seek some sort of deal with old partner Iran Khodro Company (IKCO), while Renault is presently in talks with Saipa about buying an equity stake in its Pars Khodro subsidiary, the report noted.

As well as the possibility of higher auto exports, Iran has also witnessed a rising trend in imports over the past calendar year, as the domestic political and economic backdrop improved slightly.

Speaking to the Iran Daily in February, the vice president of the parliament's economic Committee, Iraj Nadimi, stated that car imports have increased since mid-March 2014.

The BMI report added that it predicts electric cars could start to play an increasing role within the Iranian auto sector. Citing Fars news agency, it noted that Iranian carmaker Diyar Khodro had unveiled the country's first domestically manufactured electric car, named Sabrina, in January.

The carmaker has begun trial production of the Sabrina and expects large-scale manufacturing to begin in the next Iranian calendar year, starting March 21, 2016. It plans to manufacture 42,500 units a year.

European car companies, specifically France's Renault, and PSA Peugeot-Citroen are making plain their desire to restart their presence in the market. The report also said that this time their local partners are looking for more models.