Car Production in Iran Continues to Decline

While Iranian automakers are facing delays in delivering pre-sold vehicles, car production in Iran has decreased by another 35%. According to statistics from the Ministry of Industry, Mine and Trade, from the beginning of this year until the end of January, 812,979 vehicles of various types were produced in Iran, indicating a 35.4% decrease compared to last year. In the same period last year, 1,257,000 vehicles were produced in Iran. The majority of the production decline is attributed to Chinese and French cars. Production of Renault products has sharply decreased as the company has suspended its activities in Iran. Peugeot has also taken similar action, but only the production of new models such as the Peugeot 2008 has been halted, while production of models like the Peugeot 206 and 207, which Iran has managed to largely localize, continues, albeit at a slower pace. Some Chinese companies that have extensive collaborations with European automakers have reduced their activities in Iran. Brilliance China, which has significant cooperation with German automakers, is among these manufacturers. In the first 10 months of this year, 758,000 passenger cars were produced by automotive companies, showing a 35% decrease compared to the same period last year. During this time, 42,000 pickups were produced in Iran, indicating a 32% decrease. By the end of January, 1,207 vans and 1,540 minibuses and mid-buses were produced in Iran, showing a respective growth of 82% and 62% compared to the same period last year. An analysis of the Ministry of Industry's statistics indicates that by the end of the tenth month of this year, 540 buses and 9,000 trucks, light trucks, and tractors were produced in Iran, reflecting a 63% and 28% decline, respectively. Major truck manufacturers like Mercedes-Benz and Volvo, which intended to invest heavily in Iran's truck manufacturing industry, have halted their operations due to new U.S. sanctions and the country's exit from the JCPOA. In January of this year, a total of 50,000 vehicles of various types were produced in Iran. Despite the production decline, Reza Rahmani, the Minister of Industry, Mine and Trade, stated, 'With the efforts of the Deputy for Industrial Affairs and the determination of obligations for automakers to fulfill their commitments to customers, the issue has been well managed.' The Saipa company claims to have achieved a 19.8% increase in production with an average daily output of 1,168 vehicles in the 45th week, compared to 975 vehicles in the 43rd week and 1,095 vehicles in the 44th week. While Iranian automakers' production has decreased, these companies are facing challenges in delivering their vehicles to customers. While Iranian automakers have increased their product prices and initiated new pre-sales, they have still been unable to produce many of the vehicles that were supposed to be delivered this year. According to Iranian automakers, after the factory price increase, car prices in the market were supposed to be adjusted. However, insufficient supply of vehicles from automakers has prevented this from happening. Currently, domestic vehicles are still being offered at high prices in the market, and in some cases, the prices of certain vehicles have increased. The rise in domestic car prices continues in a market facing a sales slump, and many individuals who purchased cars in previous months are now waiting to see if prices will rise further before selling their vehicles. Conversely, buyers are holding back and are not willing to pay for purchasing cars. Saeed Motameni, the head of the car showroom union, stated to Fars that 'automakers announced that they would price their products 5% below market prices, which has intensified market prices since, alongside the increase in factory prices, vehicle supply did not grow, and thus the announcement of factory price increases only perpetuated high vehicle prices in the market. Announcing this news in a situation where immediate and 15-day sales of cars by automakers are not taking place has only intensified prices and prevented a decrease in vehicle prices in the market.' However, the issue of price increases is just one of the reasons for customer dissatisfaction; some individuals have been told that certain models cannot be supplied by automakers, and it is better to change their vehicle model. Meanwhile, many buyers claim that automakers have sold them products at prices higher than the market, including Renault cars and some Chinese products.