Iran Auto Industry’s Overview

EghtesadOnline: Iran’s Industries Ministry has released its monthly automotive statistical report covering local manufacturers’ output during the first Iranian month, which ended on April 20.

News ID: ۷۸۲۸۴۰

03 June 2018

According to the report, Iran’s total automotive output stands at 80,140, a 17.5% rise compared to the one-month time span the year before.

The number of vehicles produced during the month totaled 76,239, up 18% from last year. Pickup trucks and trucks have both experienced growth as well, 6.3% and 23.7% year-on-year, respectively.

The numbers can be put into a more clear perspective when the share of the top two car manufacturers in the country is compared, according to Financial Tribune.

SAIPA

For the third consecutive month, SAIPA has outstripped Iran Khodro as the largest carmaker in Iran in terms of total output.

Figures indicate that SAIPA saw a 45.4% YoY hike in cars and commercial vehicles production, in stark contrast with IKCO’s 0.1% decline.

SAIPA’s vehicle output amounts to 35,381, a staggering 48.2% y/y rise. The company’s truck production went from 86 to 211, an impressive 145.3% YoY increase.

Pride’s production has experienced a 13.2% YoY growth, reaching 12,177 units in one month. The figure comes as a surprise as the infamous vehicle’s manufacture was on a downward trend last year when debates on suspending its production escalated.

Pride has been produced since 1993 and is based on a Kia Motor’s hatchback from the 1980s. While the South Korean firm put an end to the sales of the model in 2000, SAIPA bosses have rejected repeated calls by the national standards organization, economic experts and respected environmentalists to do the same.

The company’s collaboration with France’s Renault is going smoothly as evidenced by the production numbers. Renault’s Logan (locally better known as Tondar 90) did see a decline by 99 units but Sandero’s production was raised by 29 units, making the reduction negligible. SAIPA produced 3,606 units of the two Renault models. Renault cars have a 10.2% share in SAIPA’s total output.

In addition to Renault, SAIPA has strong ties with Chinese carmakers namely Changan, Zotye and Brilliance. The company produces a wide array of models through joint ventures with the Chinese firms accounting for 12.7% of SAIPA’s total output. The company manufactured 4,493 Chinese-derived vehicles during the one-month period.

Iran Khodro

IKCO seems to be losing the game to its archrival as the company’s production rate has declined 0.1% YoY, manufacturing 33,919 units, down from the 33,947 made during the first month of the last Iranian year.

In recent years, the firm’s output was always on an upward trend, making the unexpected reverse a warning sign for the business.

The figures show IKCO has gone off track lately, giving the market insiders something to scratch their heads over, and wondering if SAIPA has replaced the firm as the largest car manufacturer for good.

One of the major foreign partners of IKCO is PSA Group’s Peugeot brand. IKCO and Peugeot signed a €400-million deal in June 2016. Through the 50-50 joint venture known as Iran Khodro Automobiles Peugeot (IKAP), three models, namely Peugeot 208, 2008 and 301, are planned to be mass-produced in Iran.

The production of the 2008 was launched in Iran in March 2017. However, the model is absent from the Industries Ministry’s report altogether which means during the opening month of the current Iranian fiscal not a single unit of the model has been made in Iran.

IKCO also produces Peugeot 405 and 206 which are vastly popular with Iranian car buyers considering their budget pricing and relatively acceptable quality. The company’s Peugeot production has decreased by 527 units, now standing at 21,715—indicating a slight 2.3% decline.

It merit mentions that the reported decline could have been sound of music to Iran’s national standard organization since the body has often called on IKCO to curb production of the 405 which is deemed as substandard. However, the detailed statistics indicate that the production of the 405 has increased 5.9%.

This is while production of Peugeot 206 has observed a 12.1% decline. The model is considered as a decent ride with an acceptable price by the public and the environmentalists.

Just like SAIPA, IKCO produces Renault’s Logan. However unlike SAIPA’s smooth collaborations with the French carmaker, seemingly the Renault model’s production at IKCO has a bumpy time. Compared to the same period of the last year the total output of the model at IKCO has been slashed down to 1,031 indicating a sharp 51% fall.

Private Carmakers

Chinese carmaker Chery’s operations in Iran observed a slight 2.5% YoY increase in Iran in terms of total output. The manufacturer also known as Modiran Vehicle Manufacturing Co. has produced 3,680 units in Iran.

The company has a wide variety of models on offer in Iran and is the leading private automaker in the country in terms of total output.

Iran’s second largest private carmaker Kerman Khodro collaborates with four Chinese auto firms namely, BYD, JAC, Lifan and Geely in addition to South Korea’s Hyundai Motors.

The company has observed a 9.5% YoY fall in its production rate during the one month period, with its total output dropping to 2,969.

According to the statistics, the company’s collaborations with the South Korean firm is booming with Kerman Khodro producing 1,028 Hyundai cars in the central city of Bam during the one-month period, up 102% compared to the same period last year.

Under a joint venture deal signed in March 2017, Kerman Motor assembles two Hyundai cars namely small city hatchback i20 and sedan model Accent in Bam, Kerman Province.

The company produced 1,941 Chinese-derived cars during the period, indicating a 30.8% fall.

Foreign Partners

Iranian carmakers have cobbled together a wide variety of models through collaborations with French, South Korean and Chinese carmakers.

Locally designed vehicles like Dena, Samand, Runna and Tiba had a 44% share of the cars made in Iran, during the first month of the Iranian year.

Homegrown vehicles held 38% of the market’s share during the year which ended in March, showing the first month of the new Iranian year has been favorable to locally-designed cars.

Among the homegrown vehicles produced, the majority belongs to SAIPA, with 76.16% or 25,593 locally-designed cars versus IKCO’s 8,010.

Cars produced through collaborations with French carmaker Renault and Peugeot have a 35% share of the industry’s total output. The models had a 44% share of the industry during the preceding 12 months.

IKCO has jointly produced 22,746 cars with French carmakers, while SAIPA has made 3,606.

Asian countries seem to be on an upward trend during the current year, with China and South Korea both capturing more of the market, 17% and 3%, up from their respective 15% and 2% during the last Iranian year.