News ID: 241312
Published: 0222 GMT April 12, 2019

Minister: Iran’s auto production grows 70% despite sanctions

Minister: Iran’s auto production grows 70% despite sanctions

Iran’s auto production grew by 70 percent last Iranian year (ending March 20), said Iran’s Minister of Industry, Mine and Trade Reza Rahmani on Friday.

The minister said that the increase in auto production was registered while the country was under the toughest economic restrictions, IRNA reported.

The enemies, who imposed economic pressure on Iran, aimed to paralyze the production cycle, including the auto industry, Rahmani said.

He, however, noted that they failed to do so with the prudence of Iranian officials in the light of support from the nation.

The minister said that reducing imports of auto spare parts from foreign countries is one of the main agendas of the Ministry of Industry, Mine and Trade.

At present, some 15 Iranian provinces are producing high quality auto spare parts, Rahmani added.

A senior Russian official said in February that the country’s largest carmaker AvtoVaz is negotiating the assembly and sale of its cars in Iran where there is massive pent-up demand for new automobiles.

“Negotiations are underway with a number of countries such as Iran,” Viktor Kladov, director for international cooperation and regional policy of Russian state conglomerate Rostec, was quoted as saying.

AvtoVaz, majority-owned by France’s Renault and its alliance partner, Nissan, produces Russia’s best-selling Lada brand.

Renault-Nissan has a 67.1 percent stake in the holding company that controls AvtoVAZ. The French company initially bought 25 percent of AvtoVaz in 2008 for $1 billion.

Nissan runs a plant with a capacity of 100,000 light vehicles a year in St. Petersburg. PSA Peugeot Citroen, together with Mitsubishi, runs a plant in the region of Kaluga with a capacity of 125,000 cars per year.

Both Renault and its competitor Peugeot-Citroën put their development in Iran on hold after new US sanctions went into effect in August, 2018.

PSA had signed production deals worth €700 million, while Renault had announced a new plant investment to increase production capacity to 350,000 vehicles a year.

For AvtoVaz and its likes, Iran’s massive auto market offers a fertile ground for development and expansion in the absence of Western rivals.

Home to more than 80 million people, Iran has a huge demand for automobiles. According to the Ministry of Industry, Mine and Trade, the country produced more than 1.5 million cars only in 2017, up some 14 percent from the year before.

Iran Khodro and Saipa control some 90 percent of market share, assembling Peugeot-, Renault- and Kia-brand vehicles from kits, in addition to Chinese cars in much lower numbers.


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