According to official statistics the Iranian car market has achieved an annual average growth of 25 percent and therefore it is one of the fastest expanding sectors in the Iranian economy.
 
The development of an own automobile industry and an associated supplier industry is encouraged by the government through joint ventures with foreign car manufacturers. This is intended to boost the transfer of technologies and production methods into the country and enhance the quality of local production. Some of the focal areas in product development and manufacturing in the supplier sector are filters, compressors, pistons, injection pumps, starter motors and CNG equipment and tanks.
Cooperations aimed at lowering energy consumption as well as minimising pollutant emissions from cars have good future prospects.
 
The long-term prospects for the automobile and supplier industry in Iran are still favourable. A small number of vehicles and a distribution of roughly one car for every ten people is a sign of high market potential. The vehicle stock is put at around seven to eight million units (one third in Tehran). Comparatively high prices for cars favour foreign car manufacturers, who also benefit from the quality deficits of domestic cars and the lack of customer orientation.
 
Domestic demand for automobile parts is predominantly supplied by foreign imports. The annual import of parts fluctuates between three and four billion US dollars. Due to the partial opening of the market for complete cars as well as the reduction of import duties from between 160 to 170 percent to 90 percent, the presence of foreign premium vehicles has increased on the streets of the capital.
Iran Khodro, the Middle East's biggest carmaker, aims to boost output and exports in the coming years despite a global downturn in the sector and Western sanctions on the country that have pushed up costs. The carmaker plans to increase production to one million cars and pick-up trucks by 2011/12 from 545,000 units in 2007/08, CEO Manouchehr Manteghi said. Iran Khodro has partnerships with global carmakers, such as a joint venture with France's Renault to make the Logan, sold in Iran as the Tondar-90, and also Peugeot's 206 and 405 models.
The Iranian automobile manufacturer SAIPA launched its first car in December 2008. The compact notchback limousine is called Miniator and includes a 1.5-litre big four-cylinder engine with 59 kW/80 PS, also designed in Iran. A production capacity of 200,000 cars is scheduled.
 
The future supply prospects for foreign part manufacturers are dependent on the development of local vehicle manufacturers. In the period 2006/2007 automobile production reached almost 920,000 cars according to revised figures.
 
 
(Sources: www.bfai.de, www.automobilwoche.de, www.autonews.com)