User:Susan Schneegans/sandbox/Iranian automotive industry

The Iranian automotive industry is the third largest after after oil and gas, accounting for about 10% of GDP and employing about 4% of the labour force. There was a boom in local car manufacturing nbetween 2000 and 2013, driven by high import duties and a growing middle class. In July 2013, sanctions imposed by the USA prevented Iranian companies from importing the vehicle parts upon  which domestic cars rely; this caused Iran to cede its place to Turkey as the region’s top vehicle manufacturer.

The Iranian car market is dominated by Iran Khodro (IKCO) and SAIPA, which are subsidiaries of the state-owned Industrial Development and Renovation Organization. SAIPA (standing for Société anonyme iranienne de production automobile) was founded in 1966 to assemble French Citroën cars under license for the Iranian market. IKCO was founded in 1962 and, like SAIPA, assembles European and Asian cars under license, as well as its own brands. In 2008 and 2009, the government spent over US$ 3 billion on developing infrastructure to enable vehicles to run on compressed natural gas. The aim was to reduce costly petrol imports due to an insufficient refining capacity in Iran. With the world’s biggest natural gas reserves after the Russian Federation, Iran rapidly became the world leader for the number of vehicles running on natural gas: by 2014, there were over 3.7 million on the road.

In 2010, the government reduced its participation in both companies to about 20% but the deals were annulled the same year by the Iranian Privatization Organization.IKCO is the biggest car manufacturer in the Middle East. In 2012, it announced that it would henceforth be reinvesting at least 3% of company sales revenue in R&D. For years, Iranian carmakers have used nanotechnology to increase customer satisfaction and safety by providing such comforts as anti-stain dashboards, hydrophobic glass planes and anti-scratch paint. In 2011, the Nanotechnology Initiative Council announced plans to export to Lebanon a series of ‘home-made’ nano-based engine oils manufactured by the Pishgaman–Nano-Aria Company (PNACO); these nano-based oils reduce engine erosion, fuel consumption and engine temperature. In 2009, researchers at Isfahan University of Technology developed a strong but light nanosteel as resistant to corrosion as stainless steel for use in road vehicles but also potentially in aircraft, solar panels and other products.

The sanctions imposed in 2013 hit exports particularly hard, which had doubled to about 50,000 cars between 2011 and 2012. This prompted IKCO to announce plans in October 2013 to  begin selling 10 000 cars a year to the Russian Federation. Traditional export markets include Syria, Iraq, Algeria, Egypt, Sudan, Venezuela, Pakistan, Cameroon, Ghana, Senegal and Azerbaijan. In 2014, French car-makers Peugeot and Renault resumed their traditional business with Iran.

Most of the companies developing high technology in Iran including the automotive industry are state-owned. The Industrial Development and Renovation Organization (IDRO) controls about 290 of them. IDRO has also set up special purpose companies in each high-tech sectorto co-ordinate investment and business development. In 2010, IDRO set up a capital fund to finance the intermediary stages of product- and technology-based business development. Some 80% of state-owned firms are due to be privatized over the ten years to 2014, further to an amendment to Article 44 of the Constitution in 2004. In May 2014, Tasnim News Agency quoted Abdollah Pouri Hosseini, the head of the Iran Privatization Organization, as saying that Iran would be privatizing 186 state-run companies in the new year (beginning 21 March 2014 in Iran). Twenty-seven of these companies have a market value each in excess of US$ 400 million, he said. Several key industries remain largely state-owned, however, including the automotive and pharmaceutical industries.