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Iran Auto Industry 2 June 2016- Bruegel
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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: [email protected],
IRAN AT GLANCE
IRAN’s Economics Index
IRAN Auto Industry
IKCO Vs. ISAIPA Group
Opportunities and suggestions
Content
IKCO Vs. SAIPA Group
Iran’s Spare Parts Industry
The Cyrus Cylinder is a document issued by Cyrus the Great and known as The First Charter of Human Rights.
IRAN
5
Persepolis 500 BC
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 boundaries 4,137 km
Sea boundaries 2,700 km (Including the Caspian Sea)
River boundaries 1,918 km
Border countries
Afghanistan, Azerbaijan , Armenia, Iraq, Pakistan, Turkey, Turkmenistan +9 sea neighbors
Climate Mostly arid or semi-arid, temperate along Caspian coast and mountainous temperate along west and north-west.
Natural resources Petroleum, natural gas, coal, chromium, copper, iron ore, lead, manganese, zinc, sulfur
Land use: Arable land 300,000 sq. Km 18.2% Meadows and pastures
900,000 sq. Km 54.6%
Forest and woodland
120,000 sq. Km 7.3%
Other 258,000 sq. Km 15.7% Irrigated land 70,000 sq. Km 4.2%
Population 78.03 million (2015) Population growth rate
1.30% (2015)
Iran at glance 3
Religions Muslim 99.56%
Zoroastrian, Christian & Jewish 0.44%
Languages Persian, Azeri, Kurdish, Lori, Baloochi, Arabic
Population Literacy (2015)
79,668,323(2015) Total 94%
University's students
5 M (annually 1 M graduate,<300,000 Engineers, <60% ladies)
Total Imports 53451 million US $ (2012)
Total Exports 98033 million US $ (2012)
Foreign Direct Investment
4870 million US $ (2012)
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
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 Saffron
Iran is known for its agricultural products which are mainly related to soils:
IRAN: 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
o Iran is one of the few developing countries with great success in girls' education
Education is considered a top priority in the development plans of the country.
IRAN: 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.
o Electrical o Pharmaceutical and health
o Chemical and cellulose
o Construction industry
o Automotive industry
IRAN: INDUSTRY OVERVIEW
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.
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IRAN AUTO INDUSTRY
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Iran Vs. World
q More than 38 countries are active in Auto Industry
q 90% of Auto production belong to 22 countries
q World Auto Industry’s turn over annually 2700 B$
q Auto industry share in Iran’s GDP= 3.5%
q 18.8% of Iran’s Industry belong to Auto Industry
q & 12% of total employment of the Country
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production
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% change 2015 2014 Type of vehicle
-6.9 892600 958339 Car -51.5% 73187 151044 Pick up
85.1% 511 276 Mini &
middle bus 6.9 696 651 Bus
-53.1 9842 20977 Heavy vehicle -13.7 976836 1131287 total
Production (by type in 2015-2016)
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Export
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Export by Iranian car manufacturer
% success Programmed exp. Actual Exp. company
32.1 45000 14450 Saipa 34 30000 10198 IKCO 4 250 10 Saipa Diesel
30.6 350 107 IKCo Diesel 0 900 0 Others
32.4 76500 24765 Total
* Total Export in 2014( Units) 28432
* 12.9% reduction of export in 2015
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IRAN Auto Industry’s
prospective in 2025
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Quantitative goals of 2025
Ø Total annual production of 3 M. Vehicle (2 M for domestic& 1 M
for Export)
Ø Minimum of 50% of production under domestic Brand
Ø 25 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)
Ø Increasing of Auto industry share of GDP to 4%
Ø reaching of 20% share in industry sector of Economy.
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Prospective of production on 2025 (1000 Units)
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Year
3000 2800 2700 2550 2400 2250 2100 1900 1750 1600 Car
1000 830 690 580 500 380 320 260 200 1400 Export
120 110 100 90 80 69 60 52 43 35 Heavy vehicle
30 22 15 10 8 6 4 2.5 1.5 1 Export
Quantitative goals of 2025 p/2
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v Improve and enhancing of Quality and a9er sells services
v Reduc;on of pollu;on(all kind) v Reduc;on of fuel consump;on
Qualitative goals of 2025
34
Auto industry’s posision
World Ranking of Vehicle Production
In 2014 Iran ranked 18th in the volume of Vehicle Production
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Auto industry capacity
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Type Capacity (annually)
Car 1800
Pick up 175
Mini bus and Bus 36
Tracks and trailer 170
Total 2126
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List of car manufacturer
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name of company No. Azar Etesal 25
Arya everest Mashin 26 Arya dessel motor 27
Aras Khodro Dessel 28 Iran Khodro Industry group( Ikco) 29
Iran Khodro dessel 30 Brojen Khodro 31 Bahman dessel 32
Toseeh fanavariyae pishrafteh Azar Abagan 33
Toseeh bynolmel lutus 34 Tolidy Tajhizat Sangin Hepco 35
Tirajh dessel 35 Khodro sazan Bam 37 Khodro sazan rein 38
Khodro sazi pishro dessel Asia 39 Khodro sazan Desslel Azarbayjan 40
Khodro sazi Zagros 41 Khodro sazi setareh Nik Arya 42
Khodrokaran Iran 43 Raniran 44
Rayan Fangostar dessel 45 Rakhsh Khodro dessel 46
Zamyad 47 Zarrin Khodro 48
name of company No. Saipa Group 1 Saipa Dessel 2 Sabalan Khodro Mayone 3 Sepeh dessel Kaveh 4 Saman Khodro Kumesh 5 Sinad Khodro Tus 6 Siba motor 7 Sair o safar Rakhsh 8 Shahab khodro 9 Sanaye Arg Dessel 10 Sanaye Puya Khodro Garmsar 11 Sanaye Khodro Sazan Modiran 12 Sanaye Khodro Rili Akia Douche 13 Sanaye Khodro Kavir 14 Oghab Afshan 15 Karsan Yekta 16 Karizan Khodro 0 Qazwin 17 Kerman Khodro 18 Bahman Groupe 19 Mamut Dessel 20 Mobarez 21 Moratab 22 Huran Khodro Dessel 23 Yavaran Kodro Sharq 24
List of Iranian Automotives manufacturer
Iran Sale volume and Market share
SAIPA’s market share in SAIPA Group SAIPA Group’s market share
IKCO 44%
Import 4%
Others 9%
SAIPA 30%
Pars Khodro 7%
SAIPA Kashan
2% SAIPA Diesel 1%
SAIPA Group 43%
42.691 50.633 41.610
43.389 35.405
41.767
78.498
80.000
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
2007 2008 2009 2010 2011 2012 2013 2014
Production Import
Iran sale Volume
IRAN MARKET (PASSENGER CAR)
SAIPA’s market share in SAIPA Group SAIPA Group’s market share
PARS KHODRO A good companion for whole life
IKCo 43.4%
Import 4.8%
Others 6.5%
SAIPA 35.1%
ParsKhodro 7.7%
SAIPA Kashan 2.4%
SAIPA Group 45.2%
IRAN: OPPORTUNITIES TO INVEST
o Strategic Location o Market Potentials and Proximity
o Labor Privileges
o Developed Infrastructure
o Low Utility and Production Cost
o Abundant Natural Resources
o Climatic Characteristics
o Fiscal Incentives
Iran is certainly a unique market in the Middle East. It is populous, rich in natural resources and apt to technological progress and international developments. The country's natural resources create a significant wealth. In fact, based on a resource-based evaluation, the Iranian economy is the 20th strongest in the world
Auto industry : OPPORTUNITIES TO INVEST
Regionally and internationally o The most stable and safe country of
ME o 16 neighboring countries , more than
400 M population o Advantages of regional
corporations( ECO, Shanghai, IOR-ARC)
o Hub of transit route (NS/ EW) o Easy access to the sea (Persian golf &
Caspian see,..) o Links of railway network to
neighboring countries o All of auto industry’s sanctions
removed after JCPOA o Several financing, FDI and insurance
covers suggested (more than 100 B$) o Major foreign partner : France(30%),
South Korea (25%), Japan, China, Sweeden
o Neg, partner: Italy, Germany, UK,
Internally • Iran ‘s domestics market rapidly expanded. • Most of infrastructure needed are available • Most of raw materials and cheap energy accessible. • Iranian Greet industrial groups could support and provide requirements. • Huge Talented engineers and skilled man power available. • advanced law and regulation of investment protection with a lot of incentives. • 50% empty capacity of industry available (means no need for capacity building of new produces) • Free trade zones and SPZ,s with a lot of incentives.
Iran’s spare parts Industry By: 1 June 2016
Mohsen Pakparvar Senior Expert Head of Energy & International Economics studies group Institute for Political and International Studies (IPIS) Ministry of foreign affairs Islamic Republic of IRAN E-mail: [email protected]
q 1200 participants in the supply chain.
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Cluster 2 Mash’had
(Great Khorasan)
Cluster 4 Isfahan (Central Provinces)
Cluster 7 Shiraz (Southern & Southeastern
Provinces)
Cluster 1 Tehran
(Southern border provinces of Alborz) Cluster 5
Saveh (Western Provinces)
Cluster 3 Tabriz
(Northwestern Provinces)
Cluster 6 Babol
(Northern border provinces of Alborz)
125
46
91 48
112
718 units
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Dispersion of Parts Manufacturers in the Country 7 clusters
q Spare Parts Manufacturers followed Automakers in industrial zones
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q Parts Manufacturers Companies: 1200 units
q Direct employee of Parts Manufacturers Industry 500,000
q Investment: 3 B$
q Indirect Employee: 600,000
q The Amount of Working Capital: 4.5 B$
Statistics on Parts Manufacturers in 1394 (2015)
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u Spare Parts Sales: 7 B$
u Spare part's Share of total Industry: 9%
u Interest Paid: 0.7 B$
u Salaries paid: 1.5 B$
u Imports of major items of Iran’s Parts Manufacturing Industry: $ 3 billion
($ 1.6 billion in 92)
Statistics on Parts Manufacturers in 1394 (2015)
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2015 2013 2009 2005 176 168 124 69 License
82 73 30 41 Joint Venture
59 53 42 6 Technical Assistance
38 34 0 0 Technology Transfer
25 10 0 0 Exclusivity Agency
380 338 196 116 Total
Type of Cooperation Year
International Cooperation of spare Parts Manufacturers & Iran auto Industry
1000 Units More than 1.6 million vehicles In 1390
Almost 900,000 vehicles In 2015
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spare Parts
0
200
400
600
800
1000
1200
1800
1600
1400
The Production of Vehicles and spare parts in Iran (1990 - 2015)
سساالل 1376
سساالل 1380
سساالل 1384
سساالل 1388
سساالل 1393
سساالل 1394
50
9
7
5
3
1.5
0 B$
100 M$
6 B$
3.5 B$
Megamotor
Saazeh Gostar
SAPCO
Trend of domestics major spare parts Suppliers sales 1997- 2015
51
1650
400
675
575
B$(2015)
The total spare
Parts market.
The spare parts produced by automobile
manufacturers ( 25%)
Spare Parts manufacturers
Produced Along with
automobile manufacturers
(40%)
The Export market (35%)
Spare Parts International Market
52
Cooperation agreements with:
q Indian spare Parts Manufacturers Association.
q French spare Parts Manufacturers Association.
q Austrian spare Parts Manufacturers Association.
q Turkish spare Parts Manufacturers Association.
q Spare Parts Manufacturers Association of Bavaria State (Germany).
Also cooperation with the Associations of spare parts manufacturing
of Italy, Japan, Taiwan, China and Slovakia is under negotiation.
Agreements with foreign spare Parts manufacturer
53
Exports of spare Parts (M$)
Export in 2014
Export in 2015
Plan of 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.
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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)
Expectations of government from spare parts manufacturers
Suggestions
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 All right reserved for IPIS, for more information ask: [email protected]
