Chinese automakers ready to rule Iran’s car market image

As the country prepares itself to see the western restrictions lifted soon, the western automakers might find that its auto market landscape has changed quite a bit, with new competitors from the East already filling the slots.

The new rivals mostly come from China, headed by Chery Automobiles Co., Lifan Industry Group Co. and Anhui Jianghuai Automobile Co. The latter, for example, offers JAC models, Italian-designed and assembled on site in Iran – with prices around 30 percent lower than what comparable rivals would offer. The Chinese automakers took full advantage of the country’s void left by automakers such as PSA Peugeot Citroen, as the French company once treated Iran as its biggest market apart from the home country. The Chinese are en rout to lift their overall market share of the Iranian auto commerce from around one percent back in 2011 to more than 9 percent in 2016, with researcher IHS Automotive estimating the market to be around 1.17 million units worth in that period.

According to a recent proposal for a new nuclear deal, sanctions against the country are being tentatively eased or even lifted and European carmakers aim to fully profit from the new climate. Still, the pact might fall entirely, as U.S. lawmakers are claiming the right to veto the final agreement, while Iran’s president Hassan Rouhani wants no deal if the sanctions are not aborted. Chery, Lifan and Jianghuai, for example, already have local partnerships to domestically build the vehicles in Iran in kit form, with the Chinese companies’ share of the manufacturing sector already more than quadrupled to 8 percent between 2011 and 2014, according to IHS.

Via Bloomberg