Iran Automobile Industry Market Size (2024 - 2029)

Iran Automobile Market Analysis

The Iran Automobile Industry Market size is estimated at USD 37.96 billion in 2024, and is expected to reach USD 59.93 billion by 2029, growing at a CAGR of 9.57% during the forecast period (2024-2029).

Iran’s automobile industry is of economic and political importance to the government and functions as a solid infrastructure for increased production.

The industry accounts for 10% of Iran's GDP and 4% of its workforce, second only to the oil and gas industry. There are around 13 public and private auto manufacturers in Iran, with IKCO and SAIPA accounting for about 94% of the domestic production.

The Iranian automobile industry was struggling before the COVID-19 pandemic. Iran was one of the most severely affected countries in the world during the first wave of the pandemic globally. The virus led to lockdowns and shutdowns of vehicle and vehicle component manufacturing facilities, dealerships, and showrooms, resulting in less demand and decreased production.

The major car manufacturers in the country are increasing their production with locally manufactured parts and components. For instance,

• In March 2023, IKCO, the largest car manufacturer in Iran, announced its first electric car for commercial purposes, which was launched in Iran. The IKCO technology arm Jetco designed and developed this model with a battery pack of 45 kWh, which can travel 300 km on a full charge.

Over the long term, local OEMs and major manufacturers in the country are expected to sign agreements and form associations with the university and research institutes to upgrade the manufacturing technology related to auto parts and components, which is expected to boost the market during the forecast period. For instance,

• In October 2022, six MoUs were signed between Iran Khodro Industrial Group and Saipa Automobile Group, covering the supply and purchase of raw materials and parts. These agreements also aim to establish joint engineering and R&D centers for manufacturing automobiles in the country.

With an annual production of more than 1.6 million vehicles, Iran is the world's 20th-largest automaker and one of the largest in Asia. Currently, Iranian manufacturers produce six vehicles: passenger cars, 4WD trucks, buses, minibusses, and pick-up trucks. Passenger cars account for approximately 75% of local output, with pick-up trucks accounting for about 15%.

Iran Automobile Industry Segmentation

The automobile industry comprises a wide range of companies and organizations involved in designing, developing, manufacturing, marketing, and selling motor vehicles.

The Iranian automobile industry is segmented by vehicle type and manufacturer type.

By vehicle type, the market is segmented into passenger cars, commercial vehicles, and motorcycles. By manufacturer type, the market is segmented into auto ancillaries, engines, and other manufacturer types. The market sizing and forecasts are provided in value (USD) for each segment.