Iran Auto Industry - Bruegel
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Iran Auto Industry
2 June 2016- Bruegel
By:
Mohsen Pakparvar
Senior Expert
Head of Energy & International Economics studies group
Institute for Political and International Studies (IPIS)
Ministry of foreign affairs
Islamic Republic of IRAN
E-mail: pakparvar@yahoo.com,
1
Content
IRAN AT GLANCE
IRAN’s Economics Index
IRAN Auto Industry
IKCO Vs.
IKCO Vs. ISAIPA
SAIPA Group
Group
Opportunities and suggestions
Iran’s Spare Parts Industry
IRAN The Cyrus Cylinder is a document issued by Cyrus the Great and known as The First Charter of Human Rights.
Persepolis
500 BC
5
A Country for All Seasons
Mount Damavand
Tehran
I.R.IRAN at glance
Official name
Islamic Republic of Iran
Head of State
President H.E. Dr. Hassan Rouhani
National Day
11th of February (Islamic Revolution of Iran-1979)
Capital
Tehran
Area
1,648,196 sq km
Land
4,137 km
boundaries
Sea
2,700 km (Including the Caspian Sea)
boundaries
River
1,918 km
boundaries
Border Afghanistan, Azerbaijan , Armenia, Iraq, Pakistan, Turkey,
countries
Turkmenistan +9 sea neighbors
Mostly arid or semi-arid, temperate along Caspian coast and
Climate
mountainous temperate along west and north-west.
Petroleum, natural gas, coal, chromium,
Natural resources
copper, iron ore, lead, manganese, zinc, sulfur
Land use:
Arable land
300,000 sq. Km 18.2%
Meadows and
900,000 sq. Km 54.6%
pastures
Forest and
120,000 sq. Km 7.3%
woodland
Other
258,000 sq. Km 15.7%
Irrigated land
70,000 sq. Km 4.2%
Population
78.03 million (2015)
Population growth
1.30% (2015)
rate
Iran at glance 3
Muslim 99.56%
Religions
Zoroastrian, Christian & Jewish
0.44%
Persian, Azeri, Kurdish, Lori, Baloochi,
Languages
Arabic
Population 79,668,323(2015)
Literacy (2015)
Total 94%
University's
5
M
(annually
1
M
graduate,Iran at glance 4 Electricity Production: 232,955 GWH (2010) Transportation: Railways networks 12000 km (2013) Road networks 220000 km (2013) Ports 11 commercial ports Airports 54
Economic sectors contribution to GDP growth
Iran’s trade balance
Unemployment Rate
Government Budget
Current Account Balance
Iranian Oil Resources
IRAN: ECONOMY, OIL AND GAS
o Mixed and transition economy
o Large public sector
o 60% of the economy is centrally planned
o Dominated by oil and gas production
o One of the best performing exchanges in
the world
With 10% of the world's proven oil reserves and 15% of its
gas reserves, Iran is considered an "energy superpower.IRAN: AGRICULTURAL PRODUCTS
Iran is known for its agricultural products which are mainly related to soils:
o Wheat
o Rice
o Other grains
o Sugar beets
o Sugarcane
o Fruits
o Nuts & dried
Fruits
o Cotton
o Dairy products
o Wool
o Caviar
o SaffronIRAN: EDUCATIONAL SYSTEM
o Iran has free public schools and
private schools at all levels
o Educating more than 18 million
students at segregated schools
o Education in Iran is highly
centralized Education is considered a
top priority in the
o Iran is one of the few developing development plans of the
countries with great success in country.
girls' educationIRAN: TOURISM
There are several types of tourism in Iran. Some of them include
historical, cultural, educational, Eco-tourism etc.
The image part with relationship ID rId5 was not found in the file.IRAN: INDUSTRY OVERVIEW o Electrical o Pharmaceutical and health o Chemical and cellulose o Construction industry o Automotive industry Iran is the Middle East’s biggest car producer. Its car industry, comprised of companies such as the Bahman Group, Iran Khodro and Saipa, ranks 13th in the world for total production and 5th in the world in terms of fastest growth.
IRAN AUTO INDUSTRY
24Iran Vs. World
qMore than 38 countries are active in Auto Industry
q90% of Auto production belong to 22 countries
qWorld Auto Industry’s turn over annually 2700 B$
qAuto industry share in Iran’s GDP= 3.5%
q18.8% of Iran’s Industry belong to Auto Industry
q& 12% of total employment of the Country
25production
26Production (by type in 2015-2016)
Type of vehicle 2014 2015 % change
Car 958339 892600 -6.9
Pick up 151044 73187 -51.5%
Mini &
276 511 85.1%
middle bus
Bus 651 696 6.9
Heavy vehicle 20977 9842 -53.1
total 1131287 976836 -13.7 27Export
28E
ٍ xport by Iranian car manufacturer
company Actual Exp. Programmed exp. % success
Saipa 14450 45000 32.1
IKCO 10198 30000 34
Saipa Diesel 10 250 4
IKCo Diesel 107 350 30.6
Others 0 900 0
32.4
Total 24765 76500
* Total Export in 2014( Units) 28432
* 12.9% reduction of export in 2015 29IRAN Auto Industry’s
prospective in 2025
30Quantitative goals of 2025
ØTotal annual production of 3 M. Vehicle (2 M for domestic& 1 M
for Export)
ØMinimum of 50% of production under domestic Brand
Ø25 B$ Revenue of spare part manufacturers from local market
Ø 6 B$ export of spare part
Ø Production of 120,000 heavy vehicle (75% domestic, 25%
export)
ØIncreasing of Auto industry share of GDP to 4%
Ø reaching of 20% share in industry sector of Economy.
31Quantitative goals of 2025 p/2
Prospective of production on 2025
(1000 Units)
Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Car 1600 1750 1900 2100 2250 2400 2550 2700 2800 3000
Export 1400 200 260 320 380 500 580 690 830 1000
Heavy
35 43 52 60 69 80 90 100 110 120
vehicle
Export 1 1.5 2.5 4 6 8 10 15 22 30
32Qualitative goals of 2025
vImprove
and
enhancing
of
Quality
and
a9er
sells
services
vReduc;on
of
pollu;on(all
kind)
vReduc;on
of
fuel
consump;on
33Auto industry’s posision
34World Ranking of Vehicle Production
In 2014 Iran
ranked 18th in the
volume of Vehicle
ProductionAuto industry capacity
36Type Capacity (annually)
Car 1800
Pick up 175
Mini bus and Bus 36
Tracks and trailer 170
Total 2126
37List of car manufacturer
38List of Iranian Automotives manufacturer
No. name of company No. name of company
1 Saipa Group 25 Azar Etesal
2 Saipa Dessel
26 Arya everest Mashin
3 Sabalan Khodro Mayone
27 Arya dessel motor
4 Sepeh dessel Kaveh
28 Aras Khodro Dessel
5 Saman Khodro Kumesh
29 Iran Khodro Industry group( Ikco)
6 Sinad Khodro Tus
30 Iran Khodro dessel
7 Siba motor
31 Brojen Khodro
8 Sair o safar Rakhsh
32 Bahman dessel
Toseeh fanavariyae pishrafteh Azar
9 Shahab khodro 33
Abagan
10 Sanaye Arg Dessel
34 Toseeh bynolmel lutus
11 Sanaye Puya Khodro Garmsar
35 Tolidy Tajhizat Sangin Hepco
12 Sanaye Khodro Sazan Modiran
35 Tirajh dessel
13 Sanaye Khodro Rili Akia Douche
37 Khodro sazan Bam
14 Sanaye Khodro Kavir
38 Khodro sazan rein
15 Oghab Afshan
39 Khodro sazi pishro dessel Asia
16 Karsan Yekta
40 Khodro sazan Desslel Azarbayjan
17 Karizan Khodro 0 Qazwin
41 Khodro sazi Zagros
18 Kerman Khodro
42 Khodro sazi setareh Nik Arya
19 Bahman Groupe
43 Khodrokaran Iran
20 Mamut Dessel
44 Raniran
21 Mobarez
45 Rayan Fangostar dessel
22 Moratab
46 Rakhsh Khodro dessel
23 Huran Khodro Dessel
47 Zamyad
24 Yavaran Kodro Sharq 39
48 Zarrin KhodroIran Sale volume and Market share
Iran sale Volume
SAIPA Group’s market share 1.800.000 SAIPA’s market share in SAIPA Group
35.405
43.389
Others 1.600.000
Import 9% 50.633
41.610
1.400.000
4% 42.691 41.767 80.000
1.200.000
1.000.000
78.498
800.000
600.000
SAIPA Pars Khodro
SAIPA Group 400.000 30%
43% 7%
IKCO 200.000
44%
0
2007 2008 2009 2010 2011 2012 2013 2014
SAIPA
Kashan
SAIPA Diesel
Import 2%
1%ProductionIRAN MARKET (PASSENGER CAR)
SAIPA Group’s market share SAIPA’s market share in SAIPA Group
Import Others
4.8% 6.5%
SAIPA
35.1%
SAIPA Group
45.2%
IKCo
43.4%
ParsKhodro 7.7%
SAIPA Kashan 2.4%
PARS KHODRO
A good companion for whole lifeIRAN: OPPORTUNITIES TO INVEST
Iran is certainly a unique market in o Strategic Location
the Middle East.
o Market Potentials and Proximity
It is populous, rich in natural
resources and apt to technological o Labor Privileges
progress and international
developments. o Developed Infrastructure
The country's natural resources create o Low Utility and Production Cost
a significant wealth.
o Abundant Natural Resources
In fact, based on a resource-based
evaluation, the Iranian economy is the o Climatic Characteristics
20th strongest in the world
o Fiscal IncentivesAuto industry : OPPORTUNITIES TO INVEST
Internally Regionally and internationally
•Iran ‘s domestics market rapidly
expanded. o The most stable and safe country of
ME
•Most of infrastructure needed are
o 16 neighboring countries , more than
available 400 M population
•Most of raw materials and cheap o Advantages of regional
energy accessible. corporations( ECO, Shanghai, IOR-ARC)
•Iranian Greet industrial groups could o Hub of transit route (NS/ EW)
support and provide requirements. o Easy access to the sea (Persian golf &
•Huge Talented engineers and skilled Caspian see,..)
man power available. o Links of railway network to
• advanced law and regulation of neighboring countries
o All of auto industry’s sanctions
investment protection with a lot of
removed after JCPOA
incentives. o Several financing, FDI and insurance
•50% empty capacity of industry covers suggested (more than 100 B$)
available (means no need for o Major foreign partner : France(30%),
capacity building of new produces) South Korea (25%), Japan, China,
•Free trade zones and SPZ,s with a Sweeden
lot of incentives. o Neg, partner: Italy, Germany, UK,Iran’s spare parts Industry By: 1 June 2016 Mohsen Pakparvar Senior Expert Head of Energy & International Economics studies group Institute for Political and International Studies (IPIS) Ministry of foreign affairs Islamic Republic of IRAN E-mail: pakparvar@yahoo.com
Dispersion of Parts Manufacturers in the Country
7 clusters
Cluster 3 Cluster 6
Tabriz
(Northwestern Provinces)
Babol 59
(Northern border provinces of
q1200 participants
112 Alborz)
in the supply
Cluster 1 Cluster 2
Tehran
(Southern border provinces of
Mash’had
(Great Khorasan)
chain.
Cluster 5 Alborz)
Saveh 718 units
(Western Provinces)
48 Cluster 4 Isfahan
(Central Provinces)
91
125 qSpare Parts
Manufacturers
Cluster 7 Shiraz followed
(Southern & Southeastern
Provinces)
Automakers in
46 industrial zones
45Statistics on Parts Manufacturers in 1394 (2015)
qParts Manufacturers Companies: 1200 units
qDirect employee of Parts Manufacturers Industry 500,000
qIndirect Employee: 600,000
qInvestment: 3 B$
qThe Amount of Working Capital: 4.5 B$
46Statistics on Parts Manufacturers in 1394 (2015)
u Spare Parts Sales: 7 B$
u Spare part's Share of total Industry: 9%
u Salaries paid: 1.5 B$
u Interest Paid: 0.7 B$
u Imports of major items of Iran’s Parts Manufacturing Industry: $ 3
billion
47International Cooperation of spare Parts
Manufacturers & Iran auto Industry
Year
Type of Cooperation 2005 2009 2013 2015
License 69 124 168 176
Joint Venture 41 30 73 82
Technical Assistance 6 42 53 59
Technology Transfer 0 0 34 38
Exclusivity Agency 0 0 10 25
Total 116 196 338 380
48The Production of Vehicles and spare parts in Iran
(1990 - 2015)
1000 Units
More than 1.6 million vehicles
In 1390
1800
1600
1400
1200 Almost 900,000
vehicles
1000 In 2015
800 spare Parts
600
400
200
0
49Trend of domestics major spare parts Suppliers sales
1997- 2015
9
Megamotor 6 B$
7 Saazeh Gostar
SAPCO 3.5 B$
5
3
1.5
100 M$
0 B$
ﺱسﺍاﻝل ﺱسﺍاﻝل ﺱسﺍاﻝل ﺱسﺍاﻝل ﺱسﺍاﻝل ﺱسﺍاﻝل
1376 1380 1384 1388 1393 1394
50Spare Parts International Market
B$(2015)
400
1650 675
575
The spare parts Spare Parts The Export
The total produced by manufacturers market
spare automobile Produced Along (35%)
Parts market. manufacturers with
( 25%) automobile
manufacturers
(40%)
51Agreements with foreign spare Parts manufacturer
Cooperation agreements with:
q Indian spare Parts Manufacturers Association.
q French spare Parts Manufacturers Association.
q Austrian spare Parts Manufacturers Association.
q Turkish spare Parts Manufacturers Association.
q Spare Parts Manufacturers Association of Bavaria State (Germany).
Also cooperation with the Associations of spare parts manufacturing
of Italy, Japan, Taiwan, China and Slovakia is under negotiation.
52Exports of spare Parts (M$)
Export
in
Export
in
Plan
of
2014
2015
2016
99
33
120
Major spare parts exported:
ü Vehicle Frame& body and spare parts.
ü Spare parts and rims and spokes.
ü Radiator.
ü Clutch Discs.
ü Brake drums and discs and clutch plates.
53Expectations of government from spare parts
manufacturers
u Using of foreign investment and cooperation with famous international
brands.
u Improving the quality of parts and focus on customer satisfaction
u the establishment of Design and Engineering Units (R & D) in spare
parts industry , effective corporation in the design and production and
more cooperation with domestic and international companies.
u Development of spare parts manufacturing domestically in order to
enhance competitiveness.
u Expanding share in auto industry’s global market(vehicles& spare
parts)
25Suggestions 1. Exchanging of information via governmental and private sector of Iranian com. Vs. EU com. 2. Giving suggestions to promote bilateral relations 3. Sending EU. Com. Delegation to provide F.S report (micro level) 4. B2B meeting of Auto industries com. Vs. Iranian car and spare part makers under EU umbrella. 55
The End
• Thanks for your kind attention,
Special thanks :
• Dr. Simone Tagliapietra
• Dr. Matilda Sevon
• Dr. Giuseppe porcaro
• And Bruegle
For all arrangement and hope to have
tangible business interaction with
participants.
56
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