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London, United Kingdom, 2008/11/20 - Report Buyer, the online destination for business intelligence for major industry sectors, added now added a report on the automotive industry in Iran.
Report Buyer, has added now added a report on the automotive industry in Iran.
“Iran Autos Report Q4 2008” predicts that the long-term growth of Iran’s automotive sector will be affected by the country’s state-dominated investment climate which is suffering from economic sanctions. The business environment continues to be adversely affected by the uncertain political backdrop and international sanctions. The automotive industry is suffering from a lack of foreign direct investment (FDI) and capital imports.
International sanctions, high inflation, 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. Authors of the report believe that the Iranian automotive market will contract in the 2008/09 Iranian year (running from 20 March) and that annual domestic sales are unlikely to exceed 1mn units over the next five years. Overall sales are expected to fall by 7.4% to just under 960,300 units in 2008 and will not be significantly higher than this by 2012.
The downturn in the market will have a negative impact on production, owing to manufacturers’ heavy dependence on domestic sales. With the Iranian market stagnating, growth will depend almost entirely on exports. Carmakers have come to realise the importance of external markets and are seeking export opportunities.
The opening of the country’s largest car assembly plant in July 2008 will increase automotive capacity with the ability to turn out 100,000 vehicles per annum by end- 2008/09, However, it will not necessarily increase production. Export opportunities are restricted to relatively low volumes, nevertheless, they should help push up output to 1.13mn units by 2012.
Iran scores 41.3 points (out of a theoretical maximum of 100) in the BMI automotive business environment rating this quarter, putting it eighth place, 0.7 points ahead of Nigeria and 5.6 points behind Egypt. With serious structural deficiencies in the economy and the heavy protection of the car market unlikely to be change in the forecast period, the only hope Iran has of raising its score is to ensure growth in automotive output.
“Iran Autos Report Q4 2008” is available from Report Buyer. For more info, see website.
Report Buyer product ID: BMI02750
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