Deal opens up Iranian car market
The International Conference of the Automotive Industry, the first such event in Iran, has brought together more than 150 companies from around the globe, according to organisers.
The key industry has been battered for more than a year by Western sanctions on Iran over its nuclear program.
Industry Minister Mohammad Reza Nematzadeh said he wanted "more co-operation with foreign companies", including French manufacturers Peugeot and Renault, both of which have had a long history of doing business with Iran.
Mr Nematzadeh said he hoped for the lifting of sanctions on the car industry "by the end of December".
Iran and world powers reached an interim deal last week in Geneva, with Tehran agreeing to partially roll back its nuclear work in exchange for limited sanctions relief, including measures imposed on the car industry.
In 2011, Iran had the 11th-largest car market in the world and was the 13th-largest car producer.
Patrick Blain, president of the International Organisation of Motor Vehicle Manufacturers, told AFP of the "considerable potential" in the Iranian market. "There is no reason not to come back," he said, adding that Iran could manufacture 1.6 million vehicles in 2014, the same number as it produced in 2011.
He highlighted the low car saturation rate of 89 vehicles per 1000 people, less than China, in a country with a population of nearly 77 million and a yearly per capita GDP of almost $US12,500 ($13,750).
Gilles Normand, director of operations for Renault in the Asia-Pacific market, said the Middle East represented a "future market" for all manufacturers.
Frequently Asked Questions about this Article…
The Iranian car market has opened up following a historic nuclear agreement between Iran and world powers, which led to the partial rollback of Iran's nuclear work in exchange for limited sanctions relief, including those on the car industry.
Major carmakers are interested in the Iranian market due to its considerable potential. Iran was the 11th-largest car market in the world in 2011, and the country has a low car saturation rate, making it an attractive opportunity for growth.
More than 150 companies from around the globe participated in the International Conference of the Automotive Industry in Iran, highlighting the global interest in the market.
The Iranian car industry has been battered by Western sanctions over the past year, but recent developments and the lifting of some sanctions are expected to revitalize the industry.
It is expected that Iran could manufacture 1.6 million vehicles in 2014, matching the production levels of 2011, as the market opens up and sanctions are lifted.
French manufacturers Peugeot and Renault have a long history of doing business with Iran and are expected to increase cooperation as the market opens up.
Iran has a low car saturation rate of 89 vehicles per 1,000 people, which is less than that of China, indicating significant room for growth in the market.
The Middle East, including Iran, is considered a 'future market' for car manufacturers due to its growing population, economic potential, and the recent easing of sanctions, which opens up new opportunities for expansion.
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