Boston, MA -- (SBWIRE) -- 03/14/2013 -- In our previous report BMI revised down its production and sales estimates for Iran's autos industry - despite total vehicle output by Iran's automakers increasing 2.4% year-on-year (y-o-y) to 1.64mn in the Iranian year ended March 19 2012 - owing to the withdrawal of many international companies from the country in the wake of global sanctions against its nuclear efforts.

Iran's auto industry continues to show mixed messages. As such, we have kept our sales and production forecasts unchanged this quarter.

Iranian carmakers exported 21,985 cars worth US$123mn in the first four months of the Iranian calendar year starting March 20. Key export markets were Iraq, Afghanistan, and Ukraine. The country plans to produce at least 3mn cars and export 1mn cars by 2025. Around 1.6mn cars were produced and 55,000 cars exported in the previous calendar year.

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According to RFE/RL in August 2012, Iran's leading domestic firm Iran Khodro (IKCO) announced it expects sales and exports to its main markets in Russia, the Middle East, South America and Africa to 'boom' 45%. This is down to interest in its domestically made and designed 'national' car, the Runa, unveiled in 2009. IKCO is also confident about its revamped sedan model, the Samand, which is exported to Russia via an assembly plant in Belarus and also made in Iraq. IKCO intends to adopt new marketing strategies in an effort to export 16% of its output in the coming three years and enhance its global market share. IKCO's ambitious export plans could be buoyed by the rapid development of alternative fuel vehicles, which may find a niche in markets where there is demand for green cars.

Despite this bullishness, sanctions are hitting Iran's domestic autos industry, which is the second largest sector in Iran, behind the oil and gas sector.

In July the Industry, Mines, and Commerce Ministry announced that overall domestic auto output fell 36% in the first quarter of the Iranian year (March 21 to June 20) because of 'lack of money' to buy assembly parts. According to Bloomberg Business Week, Iran's Donya-e Eqtesad newspaper quoted Mohammad Reza Najafimanesh, a union official, saying that Iran had to produce 2mn cars in the current financial year, but was likely to make only around 1.5mn, which would amount to a 25% fall. The Tehran car parts dealer Nasser Ahmadi said its sales have fallen 60%.

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