Report: Passenger car tyres dominate Iran with 70% market share
According to the recently published report by TechSci Research “Iran Tyre Market Forecast & Opportunities, 2018”, the tyre industry in Iran is projected to grow at a CAGR of around 7 per cent during 2013-18, in revenue terms, as a result of continuous increase in tyre demand from OEMs and replacement market. One of the major reasons for growing OEM demand can be attributed to the fact that more than 50 per cent of the total fleet of automobiles in Iran is over 25 years of age. Furthermore passenger car tyre sales are already dominant in Iran, with a market share estimated at 70 per cent.
The report highlights that Iran’s tyre industry is dominated by the domestic players such as Barez Tires, Kavir Tires, Yazd Tires, and Goldstone Tires, however, global tyre manufacturers such as Kumho, Goodyear, Bridgestone and Pirelli also have a significant market presence in the country.
“Iran has emerged as one of the most promising automobile markets in the Middle East region. In addition to rising domestic demand, the country is expected to witness increasing demand for automobiles from 20 neighboring countries subsequent to the country’s political scenario becoming more stable. As a result, the automotive and tyre market in Iran is forecast to grow at a significant pace over the next five years.” said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.
The automotive market in Iran is the largest among the Middle East countries. In 2011, the country was the 13th largest manufacturer of automobiles around the globe. Domestic automotive manufacturers like Khodro and SAIPA have contributed significantly towards the automobile production in Iran. Additionally, these domestic players have also taken licenses from various leading global automotive companies such as Peugeot, Renault, Mercedes Benz, Daimler AG, Suzuki, Nissan and KIA for manufacturing their car models in the country. However, due to the continuous expansion of the nuclear program by Iran, international sanctions were imposed on the country, which dramatically affected various industries in Iran. Automobile production was one of such industries that was highly impacted by the sanctions, as global automotive part suppliers were disallowed to enter into any business transactions with Iran.
The Iranian Rial also lost about 80 per cent in value against the US dollar in 2013. However, in November 2013, Iran signed an agreement for restricting its nuclear activities, which led to removal of some major sanctions imposed on the country. As a result, from 2014 onwards, the automotive industry in Iran is forecast to witness growth revival.