Azernews.Az

By Amina Nazarli

Iran’s car manufacturing suffers from recession and automakers still cannot fully take advantage of the implementation of Joint Comprehensive Plan of Action (JCPOA).

Although the nuclear-related sanctions on Iran have been removed since January 16, Iranian automakers still suffer as global banks have failed to re-establish ties with Tehran, an Iranian automaker believes.

Following a positive reaction to the removal of sanctions, the automakers' output has once again dropped.

The output of the automakers in the first two months of current Iranian calendar year (started March 20) fell by 2.8 percent reaching 158,571 vehicles.

Managing Director of Rakhsh Khodro Diesel Company Akbar Mirza-Hosseini has told Trend that Iran's automotive industry currently suffers from recession and the automakers, so far, have not fully benefited from the advantages of the implementation of the Joint Comprehensive Plan of Action (JCPOA/nuclear deal).

Unlike many observers who hoped for a surge in the industry as a number of international and European automakers demonstrated initial enthusiasm to get a foothold in the Iranian car market, Mirza-Hosseini believes the international companies appear circumspect in making big strides in the country.

"There are political reasons behind the reluctant behavior of the international companies," he said.

Mirza-Hosseini said that once Iran's automakers manage to maintain their full capacity for production, unemployment rate in the Islamic Republic will drop and the economic situation will improve.

Iran's car output during the 12-month period from March 2015 to March 2016 decreased by 13.7 percent compared to the same period of the preceding year.

Iranian companies manufactured 976,836 cars in the last fiscal year (ended March 20).

Experts say that the state of the Iranian automotive market is volatile. Since 2011 the number of car sales has decreased dramatically, falling 53 percent from 1.5 million to 0.7 million in 2013, according to consultancy.uk. The market has picked up only slightly in recent years, averaging 0.9 million between the start of 2014 and the end of 2015.

In 2012, 2013 and 2014, Iran was the 18th, 20th and again the 18th largest car manufacturer worldwide, IRNA reports.

As western-imposed sanctions on Iran over its nuclear energy program intensified in 2013, car production and Iran’s global ranking fell once again. The country manufactured only 730,000 units and dropped from 13 to 20 in global rankings.

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Amina Nazarli is AzerNews’ staff journalist, follow her on Twitter: @amina_nazarli

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