With Sanctions Lifted, Iran is Lucrative Market for Car Manufacturers
Published By : 16 Jul 2015 | Published By : QYRESEARCH
With Iran’s successful nuclear deal with the western powers, car manufacturers are happy. Iran’s automotive industry is expected to see market leader PSA Peugeot Citroen getting challenged by rivals such as Volkswagen. After the historic deal which witnessed Tehran agreeing to curb its nuclear program to lift the sanctions imposed by the western powers in the country, auto manufacturers are positioned to be the early beneficiaries.
French auto manufacturer Peugeot has already outlined plans for new production in Iran and defend its market share in the country’s automotive sector. Four years ago, before the sanctions were implemented on Iran, Peugeot was heading the market. According to industry analysts, Iran is the last big emerging market in the world and the car manufacturers are leaving no stones upturned to utilize the opportunity. In 2011, car registrations peaked in Iran with 1.6 million registered cars. However, sanctions imposed on the country led to the drop in domestic production by 1 million vehicles which further resulted in loss of more than 100,000 jobs.
Experts in the industry see the end of sanctions as a push to increase the automotive sale in the country. It is expected that sales would touch 1.6 million in 2016, with the success of the nuclear deal stretching it to 2 million. However, European car manufacturers might not enjoy the same market positions as they had enjoyed in the past before the sanctions were implemented. Chinese car manufacturers such as Lifan and Chery have gained significant market shares with low priced cars. For giants such as Volkswagen and Peugeot, success in Iran’s automotive industry is important to pave way for their success in the Middle East market.