Iran has traditionally been a high-volume automotive market, whose geographic advantage has endowed it the potential to serve as a production hub in the Middle East. The recent lifting of economic sanctions has burnished the country’s reputation as a business hotbed, with the automotive market expected to grow at a compound annual growth rate of 13.4 per cent from 2014 to 2022. Unsurprisingly, global original equipment manufacturers (OEMs), suppliers, and other market participants are exhibiting unprecedented eagerness to be a part of the Iranian growth story.
New analysis from Frost & Sullivan, Strategic Overview of the Passenger Vehicle Market in Iran finds that Iran holds huge potential in a market that is already in its growth phase. The country’s high levels of localization support and its production capabilities have earned it the status of an export hub for the Middle East. This could potentially alter the way OEMs and suppliers do business in the region.
For complimentary access to more information on this research, please click here.
Despite being the largest automotive market in the Middle East in 2014, with sales of more than 860,000 cars, Iranian suppliers’ processes leave a lot to be desired in terms of efficiency and eventually, product reliability. A key reason for this was the technology void left in the passenger vehicles market due to the long American boycott of, and early European exit from, Iranian markets.
“Iranian OEMs lack the powertrain technology, build quality, and finesse of foreign companies, and would benefit immensely from partnering with them,” said Isaac Abraham, Senior Research Analyst, Automotive & Transportation, Frost & Sullivan. “Almost the entire automotive industry is open to partnering, as international technology, modern production lines, and finance is the need of the hour.”
However, the Iranian passenger vehicle market is a complex space, with the Government having stakes among OEMs and suppliers. While the protectionist policies and high localization mandates raise the entry barriers for foreign companies at the cost of quality, they also boost local economy and employment. Chinese OEMs are already offering up to 20 per cent discounts to entrench themselves before western companies can enter the market, but customers are likely to defer purchases until western vehicles are available to them.
“Overall, the Iranian passenger vehicle market's potential to quickly launch new models with existing levels of localization and the country's high annual consumption will attract investors to the country,” noted Abraham. “Cooperation with foreign auto industries and the resulting modern technology as well as vast options in models and makes will give the push needed to make Iran an automotive hub in the Middle East.”
Strategic Overview of the Passenger Vehicle Market in Iran is part of the Automotive & Transportation (http://ww2.frost.com/research/industry/automotive-transportation) Growth Partnership Service program. Frost & Sullivan’s related studies include: Turkish Automotive Aftermarket; Rise of Virtual Cockpits in Cars; Executive Outlook of the Future of Automotive Retail; Advent of 5G in Cars, Executive Outlook of Health, Wellness, and Wellbeing Technologies in the Global Automotive Industry among others. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
http://www.frost.com Join Us: Join our community
No comments:
Post a Comment