|Frost & Sullivan Research Service||Published: 23 Dec 2010|
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.
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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However, locally manufactured cars are of lower quality and have outdated designs.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car market is dependent on the foreign car manufacturers for the technology and is treated as dumping market for outdated European car models,” says the analyst of this research.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.
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
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|Table Of Contents|
1 Executive Summary
2. Overview of the Macroeconomics Indicators in
2.2 Economic Indicators
2.3 Indicators for Population Demographics and GDP Composition
2.4 Car Penetration in
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
3.7 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
3.11 Import Duty Structure for Auto Components in
3.12 Vehicle Scrapping Policy in
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
4.9 Sales Forecasts for Passenger Cars in
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
5.1 Growth of NGVs
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
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