Frost & Sullivan Research Service   Published: 23 Dec 2010
Strategic Analysis of the Passenger Cars Market in Iran
   Research Overview

This Frost & Sullivan research service titled Strategic Analysis of the Passenger Cars Market in Iran provides a brief overview of the Iranian economy, trends for passenger cars, classification of passenger cars, and market share of car manufacturers. The research also features the trends in fuel segmentation and forecasts for the passenger cars market in the country until 2015. In this research, Frost & Sullivan's expert analysts thoroughly examine the following market segments: original equipment manufacturers (OEMs) and aftermarket parts manufacturers.

This analysis is available through our Automotive & Transportation Growth Partnership Services program. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services program ensures that you and your Growth Team™ are able to maintain a 360 Degree Perspective of the market. This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth. For more information on this custom subscription service, please click here.

Market Overview

Demand for Dual-fuel Cars to Increase in Iran’s Booming Passenger Cars Market

Car manufacturers are likely to have immense opportunities to tap the passenger cars market in Iran, as the Government’s new scrapping policy is expected to phase about 1.2 million passenger cars off the road by March 2012. This is likely to trigger a demand for more than 2.2 million units by 2015 to replace the old models and target new buyers as well. Government-owned car manufacturers, Iran Khodro and SAIPA, which dominate the Iranian passenger cars market with a combined share of 95 percent, are offering finance schemes at competitive interest rates to attract customers. In 2009, models such as Peugeot 405, Pride, Samand, Soren, and Logan accounted for more than 80 percent of the cars sold in Iran. The main reason for the popularity of these models is their low cost price due to localization, widespread dealership network, and high re-sale value.

However, locally manufactured cars are of lower quality and have outdated designs. There are more than 1,200 auto component manufacturers in Iran, of which, only 129 are Grade-A suppliers. “The Iranian Passenger car market is dependent on the foreign car manufacturers for the technology and is treated as dumping market for outdated European car models,” says the analyst of this research. “Due to the technological constraints, auto parts supplied by the manufacturers are not up to the quality mark either.” High inflation and exorbitant import tariffs discourage Iranians from buying foreign cars.

Going forward, car manufacturers will also have to manufacture dual-fuel vehicles. Iran is the seventh-largest producer of oil in the world. However, it is forced to import fuel from neighboring countries due to limitations in fuel refining. While fuel is available at heavily subsidized prices in Iran, the fuel subsidy is likely to be removed by 2011, which is expected to increase the fuel price by 40 percent. “As a result, the demand for dual-fuel cars or cars with compressed natural gas (CNG) is expected to increase by 70 percent by 2014,” notes the analyst. To meet this demand, car manufacturers are expected to produce a minimum of 50 percent of cars as dual-fuel by 2013.

The political situation in Iran too can pose a problem for business. The country is poised on the edge of a period of increased political instability with the emergence of a new style of reform movement. This movement has become increasingly radicalized over the past few years by the maneuverings of the country’s hard-line conservatives. For any manufacturer looking to enter the Iranian market, the key would be to form a joint venture with Iran Khodro or SAIPA. With no presence of the U.S. car manufacturers due to sanctions, there is also a great opportunity for Asian and European car manufacturers to set up their local manufacturing units. Localization is expected to keep manufacturing costs low.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

  • Original equipment manufacturers
  • Aftermarket parts manufacturers

Frost & Sullivan Growth Partnership Services

Frost & Sullivan's Growth Partnership Services empower companies to accelerate their growth by achieving top-line improvements and bottom-line results. This is accomplished by helping our clients execute successful growth strategies and providing their Growth Teams™ with the skills, know-how, and tools to generate growth opportunities, evaluate these opportunities to create a growth pipeline, and implement a growth strategy to deliver measurable business results.

Our growth solutions support the entire growth process:

TEAM Research

is a program that furnishes clients with access to market research, competitive intelligence, financial benchmarking, and market strategies and analysis, and provides access to industry experts to aid in generating growth opportunities.

Growth Consulting Services

unite clients with our industry experts to evaluate opportunities and develop customized strategies and business plans to drive top-line revenue and margin growth.

Growth Team Membership™

is a career-focused offering that was developed to address the unique challenges that senior executives face when implementing strategies to achieve aggressive corporate growth targets.

  Table Of Contents

1 Executive Summary


2. Overview of the Macroeconomics Indicators in Iran

   2.1 Introduction

   2.2 Economic Indicators

   2.3 Indicators for Population Demographics and GDP Composition

   2.4 Car Penetration in Iran

   2.5 Automotive Industry – Overview


3. National Automotive Policies and Aspirations

   3.1 National Automotive Policy – Industry Master Plan

   3.2 Flexible Policies to Increase Investments

   3.3 Free Trade Agreements with the GCC and Other Developing Countries

   3.4 Domestic Industry Well Protected through Import Duty

   3.5 Iran - Freezones - Governing Bodies

   3.6 Iran - Free Trade zones

   3.7 Geographical Advantages of Free Trade Zones

   3.8 Salient Features of Free Trade Zones

   3.9 Euro Emission Norms for Passenger Cars

   3.10 Import Duty Structure in Iran for Passenger Cars

   3.11 Import Duty Structure for Auto Components in Iran

   3.12 Vehicle Scrapping Policy in Iran


4. Iranian Passenger Cars Marker Overview

   4.1 Industry Structure for Iranian Passenger Automobile OEMs

   4.2 OEM Manufacturing Capacity

   4.3 Manufacturing Locations of Passenger Car OEMs

   4.4 Passenger Car Segment Classification

   4.5 Segment-wise Trends

   4.6 Key Manufacturers/Assemblers and their Product Lines

   4.7 Companies Importing Cars in Completely Built Unit Form

   4.8 Historic Sales of Passenger Cars in Iran

   4.9 Sales Forecasts for Passenger Cars in Iran

   4.10 Manufacturers’ Share in Various Segments of Passenger Cars

   4.11 Trends in the B and D Segments

   4.12 Shares of Vehicle Manufacturers

   4.13 Shares of Vehicle Brands

   4.14 Historic Production of Passenger Cars by Fuel Type

   4.15 Product Line of Iran Khodro Company

   4.16 Product Line of Saipa and Pars Khodro

   4.17 Localization Content in Top Selling Models

   4.18 Dealerships of Local Vehicle Manufacturers

   4.19 Dealerships of Importers

   4.20 Market Drivers

   4.21 Market Restraints

   4.22 Key Points

   4.23 New Model Launches Primarily in the B and D Segments

   4.24 Profile of Iran Khodro Company

   4.25 Iran Khodro Company - KeyFacts

   4.26 Saipa Automotive Manufacturing Company - Key Facts

   4.27 History of Saipa Automotive Manufacturing Company


5. Annexure

   5.1 Growth of NGVs

   5.2 Iran - Oil and Gas Statistics

   5.3 Natural Gas Pipeline Network


6. About Frost & Sullivan

   6.1 Who is Frost & Sullivan

   6.2 What Makes Us Unique

   6.3 T.E.A.M. Methodology

   6.4 Global Perspective

   List of Figures
  • Passenger Cars Market: Import Duty and Localization (Iran), 2009
  • Passenger Cars Market: Production Capacity of Passenger Car Manufacturers (Iran), 2009
  • Passenger Cars Market: Passenger Car Models Imported and Manufactured (Iran), 2009
  • Passenger Cars Market: Companies Importing Car in CBU (Iran), 2009
  • Passenger Cars Market: Dealerships of Cars Manufactured (Iran), 2009
  • Passenger Cars Market: Dealerships of Cars Imported (Iran), 2009
  • Passenger Cars Market: Market Drivers Ranked in the Order of Impact (Iran), 2010-2016
  • Passenger Cars Market: Market Restraints Ranked in the Order of Impact (Iran), 2010-2016
  • Passenger Cars Market: New Product Launches (Iran), 2009
  • Passenger Cars Market: Profile of Iran Khodro (Iran), 2009



  • Passenger Cars Market: Salient Features for Free Trade Zones (Iran), 2009
  • Passenger Cars Market: Euro Emission Norms (Iran), 2000-2014
  • Passenger Cars Market: Location of Production Capacity of Passenger Car Manufacturers (Iran), 2009
  • Passenger Cars Market: Passenger Car Segment (Iran), 2009
  • Passenger Cars Market: Historical Sales (Iran), 1999-2009
  • Passenger Cars Market: Sales Forecasts (Iran), 2010, 2013 and 2015
  • Passenger Cars Market: OEM Market Share by Passenger Cars Segment (Iran), 2009
  • Passenger Cars Market: Trends for B and D Segment Cars (Iran), 2009
  • Passenger Cars Market: Vehicle Manufacturer Market Share by Production (Iran), 2009
  • Passenger Cars Market: Vehicle Brand Market Share by Production (Iran), 2009
  • Passenger Cars Market: Production by Fuel Type (Iran), 2004-2009
  • Passenger Cars Market: Growth of NGV Stations (Iran), 1974-2009
  Further Information

Enquiries from:
Tel: +27 21 680 3260
Enquiries from:
Asia Pacific:
Tel: +65 68900999
Enquiries from:
Tel: +44 (0)20 8996 8500
Enquiries from:
Tel: +972-9-9502888
Enquiries from:
Latin America:
Tel: +54 11 4777 1550
Enquiries from:
Middle East and North Africa:
Tel: +971.4.4331.893
Enquiries from:
North America:
Tel: +1.877.GO.FROST (463.7678)
Enquiries from:
South Asia:
Tel: +91 (0) 22 6160 6666
For a full list of our offices click here.