Iran’s auto production up 40% year-on-year

Iran says its production of automobiles has already seen an increase of around 40 percent over a period of 11 months starting 21 March 2016 compared to the same period last year.

Iran says its production of automobiles has already seen an increase of around 40 percent over a period of 11 months starting 21 March 2016 compared to the same period in the previous year. 

The announcement was made by Mansour Moazzami, the board chairman of the Industrial Development and Renovation Organization (IDRO) which is the operational arm of Iran’s Ministry of Industry, Mine and Trade.

Moazzami did not provide a figure on the number of automobiles that have been produced over the period. However, he said Iran’s total production of automobiles would reach to as high as 1.3 million by the end of the current Iranian calendar year (20 March 2017). 

Iran is the Middle East’s largest auto market with a population of 80 million. The automobile industry is seen as Iran’s biggest non-oil sector, accounting for nearly 10 percent of the country’s gross domestic product (GDP).

Iranian manufacturers produced 1.6 million automobiles in 2011, about half of them by the country’s giant auto manufacturer Iran Khodro.

However, Iran’s production of automobiles dropped in 2012 as a result of the US-engineered sanctions.

The sanctions were lifted early last year after Iran reached a deal with the five permanent members of the Security Council plus Germany over its nuclear energy activities.

The deal – the Joint Comprehensive Plan of Action (JCPOA) – allows foreign investment in Iran’s car industry that had been banned from 2012 along with a series of other economic privileges. 

Elsewhere in his remarks, IDRO’s Moazzami emphasized that the JCPOA had provided a “golden opportunity” for cooperation between Iranian and foreign automobile production companies.

Nevertheless, he emphasized that foreign companies had to shift the focus of their Iran investment plans from exporting to the Iranian market to cooperating with locals in production of automobiles and parts.