BMI's Executive Summary

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Iran's automotive industry is showing remarkable resilience in the face of growing political uncertainties, threats of sanctions, dampened consumer demand and concerns over poor quality control, with BMI forecasting automotive production growth of 10.7% in the 2007-2008 Iranian year.

Although passenger car sales are forecast to grow by just 3.2% in 2007-2008, output is being boosted by the rapid rise in Iranian automotive exports, which are set to reach 350,000 units by 2012-2013, compared to just 50,000 estimated in 2006-2007. The commercial vehicle segment is also holding up well, with 22.2% sales growth in the current Iranian year, helping to increase total automotive sales by around 5.7% to over 1.1mn units. High inflation, exacerbated by fuel price hikes, and dampened consumer demand have depressed growth in the passenger car segment, but industrial growth coupled with infrastructural development is spurring demand in the commercial vehicles segment. Export growth is being sustained by CKD production for export to various joint venture assembly lines in the developing world. The country's flagship 'national car', the Samand, is enjoying some success in foreign markets and is particularly attractive to emerging markets due to its affordability, which could give it a strong foothold in the fast-growing Eastern European and CIS markets, as well as Africa, South America, South Asia and Turkey.

There are considerable risks to our growth outlook, including continued economic mismanagement and the rising possibility of international sanctions. The move towards sanctions on Iran, in relation to the government's nuclear programme, has heightened the prospect of restriction on investment and trade in the Iranian automotive industry. There is growing concern that European investors in Iran will be affected by UN and US sanctions, particularly among French carmakers Renault and Peugeot which have established joint ventures in the Iranian automotive industry. BMI believes that while the automotive industry is not immediately affected by sanctions, there are long-term problems in relation to tapping into international credit markets, increased risk perceptions among potential investors and the wider economic impact of sanctions.

Despite the risks facing the industry's relations with European carmakers, Iranian car part manufacturers are shrugging off the possibility of economic sanctions against Iran and are making a concerted attempt to enter the European market. Iranian industrialists and parliamentarians are also supportive of selling significant stakes in the country's carmakers to foreign autos majors, particularly Renault and Peugeot, by end-2007-2008. This is likely to be met with resistance from the current administration which has had a tempestuous relationship with these car firms.

Contents

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Chapter 1 – SWOT Analysis

Iran Automotive Sector SWOT

Iran Economic SWOT

Iran Business Environment SWOT

Chapter 2 – Middle East And Africa Overview

Table: Middle East And Africa Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Middle East And Africa Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Suppliers

Table: Africa Autos Sales 2005 By Segment

Table: Middle East Autos Sales 2005 By Segment

Chapter 3 – Business Environment Rankings

Table: Middle East And Africa Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production And Sales

Table: Iran Automotive Sector Historical Data & Forecast

Trade

Table: Iran Automotive Sector Historical Data & Forecast

Economic Climate

Chapter 5 – Macroeconomic Forecast Scenario

Table: Economic Activity

Country Snapshot: Iran Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Year

Chapter 6 – Special Focus: Commercial Vehicles

Regional Market Overview

Table: Regional Commercial Vehicle Market: Country Ranking, Sales

Table: Regional Commercial Vehicle Market: Country Ranking, Production

Table: Regional Commercial Vehicle Market: Company Ranking Of Significant Regional Manufacturers

Table: Recent And Planned Investments In The Middle East And Africa

Iran Commercial Vehicle Market

Table: Commercial Vehicle Production, Share Of Production By Segment And Manufacturer

Sales

Table: Size of Commercial Vehicle Market: Iran

Table: Commercial Vehicle Market Forecast: Iran

Production

Table: Production In Iran

Table: Production Forecasts For Iran

Chapter 7 – Competitive Landscape

Government Policy and Regulation

Industry Developments

Table: Samand’s Overseas Reach

Suppliers

Regulation

Table: Key Players – Iran Autos Sector Market Share

Chapter 8 – Company Monitor

Regional Case Study: Ford

Sales

Table: Ford Dealers In Middle East And Africa

Production

Table: Ford Assembly Plants In The Middle East And Africa

Company Profiles

Iran Khodro

Saipa

Pars Khodro

Iran Khodro Diesel

Saipa Diesel

Zamyad

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Middle Eastern & African Automotive Sources

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BMI's Middle East & Africa Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include:

BMI's Affiliates and Partners in the Middle East and Africa

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