On February 11, 2019, the Islamic Republic celebrated the 40th anniversary of the revolution. Since 1979, Iran's industrial sector has experienced many ups and downs. The Iranian industry (excluding the energy sector) contributes 12% to Iran's economy (GDP) and encompasses large sectors such as automotive, steel, cement, home appliances, etc. This section will also address Iran's petrochemical industry. Over the past 40 years, Iran's industry has made significant progress in some areas while not developing much in others, especially when comparing Iran's industrial growth with the world over these 40 years. The automotive industry is the largest industrial sector in Iran after oil and gas, which began two decades before the revolution and grew from 35,000 units annually in the early 1970s to 160,000 units at the beginning of the revolution.
In the early 1990s, the country's production peaked at 1.65 million units. However, a significant portion of Iran's production has been assembly of imported parts from abroad, and our report focuses more on the quantity of production rather than the quality or self-sufficiency in car manufacturing. Nevertheless, after the imposition of international sanctions against Iran's nuclear program, the automotive sector faced enormous challenges, which continue to this day. In 2017, Iran's automotive production had somewhat revived, but statistics from the Ministry of Industry show that in the first 10 months of the current solar year, production has fallen by 35% compared to the same period last year, dropping to about 813,000 vehicles. After the U.S. withdrawal from the JCPOA in May of this year, many foreign automotive companies that had collaborated with Iran left the country, and the surge of the dollar against the rial also shocked the automotive industry. Iran's share of global automotive production was about 1.5% last year.
The petrochemical industry, unlike the automotive sector, which is more focused on the domestic market, is export-oriented and accounts for 21% of the country's non-oil exports. According to the Ministry of Oil, Iran's petrochemical production before the revolution was 1.6 million tons annually, but last year this figure reached 53 million tons. However, this recent figure is not entirely accurate, as a large portion of these products is actually semi-processed goods that one petrochemical complex buys from another to convert into final products. For example, in the first nine months of the current solar year, 40.5 million tons of petrochemical products were produced, but a significant portion of that was sold between complexes, with only 6 million tons sold in the domestic market and 15.7 million tons exported. The U.S. exit from the JCPOA quickly impacted this sector as well, with 16% of petrochemical capacity idle last year, but this year, 29% of petrochemical complexes are underutilized. Even if we consider inter-complex sales of petrochemical products as part of production, the status of production, exports, and the value of Iran's petrochemical exports since 2005 is as follows:
Despite a recent increase in the volume of petrochemical exports over the past three years, export revenues have not significantly increased due to a sharp drop in oil prices and consequently the prices of petrochemical products. An important point in the automotive and petrochemical industries is that these sectors have not yet recovered from the rubble of international sanctions during Mahmoud Ahmadinejad's presidency, and almost any progress made can be traced back to before the international sanctions. In the steel industry, according to statistics from the World Steel Association, Iran's annual crude steel production before the revolution was 1.8 million tons, but this figure reached 25 million tons in 2018. In other words, Iran's steel production has increased 13-fold over the past 40 years, but Iran's share of global crude steel production before the revolution was 0.4%, which rose to 1.4% last year.
In the cement industry, Iran's cement production was 7.7 million tons annually at the end of the Pahlavi era, which increased to 17 million tons in the mid-1980s, mainly due to the completion of projects that had begun before the revolution. However, the peak of this industry's development began in the mid-2000s, with production reaching a record 70 million tons in 2014. However, since that year, cement production has consistently declined. According to the Ministry of Industry's report, the country's cement production capacity is currently 85 million tons, but in practice, only half of this capacity is utilized. Official reports cite a recession in the construction sector as the reason, but it is unclear why Iran does not leverage its unused capacity to increase exports. In the home appliance sector, Iran is primarily an importer, but given Iran's 80 million market, the domestic sector also has a significant share in the production and sale of home appliances. There are no reliable internal or external statistics regarding the amount of home appliance production before the revolution until 2005, but official statistics from 2005 onwards also do not show significant progress in the home appliance sector. According to the Ministry of Industry, Mining, and Trade, production of some key home appliances has sharply decreased over the past eight months. For example, television production has decreased by 34%, washing machines by 39%, refrigerators and freezers by 12%, and air conditioners by about 6% compared to the same period last year.