Iran’s auto industry back in business after lifting of economic sanctions

February 12, 2014

The lifting of economic sanctions on Iran announced in January will come as a huge relief to the country’s automotive industry and its suppliers, which have shed around 115,000 workers since the sanctions were introduced in July 2011. Iran saw car and commercial vehicle production fall by 40% in 2012 from the 1.649 million units produced in 2011, and by a further 38.5% in the first half of 2013 when only 359,670 units were produced in comparison with the same period in 2012.

Iran has a number of Powder Metallurgy component producers including Mashad Powder Metallurgy (including Powder Forging), Arya Powder Metallurgy Group, the Iran Powder Metallurgy Complex (PM parts and water atomised iron powders), LUT Powder Metallurgy, and Sahand Powder Metallurgy Products. All rely heavily on the automotive sector.

Iran’s auto market, which had been important for European manufacturers before the sanctions hit, is once again attracting attention for joint ventures. France’s PSA Peugeot Citroen and Renault in particular stand to gain from renewing their once-sizeable Iranian activities. Renault is reported to have resumed component shipments to Iran and expects its car production in the country to pick up progressively throughout the first half of 2014.

As recently as 2011, Peugeot sold 455,000 cars in Iran, making the country its second-largest market after France. Iran Khodso and Pars Khodro are the local car producing partners to the French car companies.


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