Iran Sets New Conditions for Foreign Car Making Firms

AzerNews (Azerbaijan)

26 April 2016

Iran, which is ambitious to become a car production hub in the Middle East region and regards the car making industry as the biggest field of non-oil sector, has set new conditions for foreign car making companies operating in the country.

In a bid to support national auto parts making industry, the country’s Industry, Mines and Trade Ministry has obliged foreign carmakers to allocate a 20-percent share for Iranian-made car parts if they want to operate in the country’s market, Arash Mohebbinejad said.

The ministry has also obliged the Iranian car makers to purchase 40 percent of the parts used in production from domestic market, ILNA news agency reported on April 25.

In accordance with Iran’s major economic development plan, the country has set a goal to boost car output to three million per year by 2025. Furthermore, Iranian car part makers are obliged to produce $6 billion worth of car parts by 2025.

… James Dorsey, a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, earlier told Azernews that initially, the car industry is likely to focus on the country’s domestic market.

“Beyond the fact that Iran has a substantial domestic market in its own right and a long-standing industry with local models, the car industry needs significant upgrading to erase the effects of years of international sanctions,” he said.

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Last updated on 27/04/2016