Automotive production in Iran plummeted by more than 42% year-on-year during the 21 March–20 September 2012 period, local media reports have said, citing figures released by the Industry Ministry.
A report carried by Iran’s ISNA news agency said total vehicle production during this period stood at around 459,440 units. This compared with 792,286 vehicles produced during the corresponding period in 2011. The report, however, did not provide an explanation for this significant drop.
The Industry Ministry reported a massive 66% year-on-year decline in automotive production during the financial month 21 August to 20 September, according to Agence France-Presse (AFP).
This decline in automotive production coincides with strengthened Western economic sanctions against Tehran. Due to the punitive measures, Peugeot has stopped delivery of parts to local vehicle manufacturer Iran Khodro (IKCO), which assembles Peugeot’s 405 and 206 models.
In February this year, Peugeot said it had stopped shipping to Iran and had also repatriated most of its staff in the country. IKCO’s production accounts for around 40% of Iran’s automotive output. The automotive segment generates around 500,000 direct and indirect jobs in the country, official estimates suggest.
According to the Iranian Association of Automobile Manufacturers, the drop in automotive production was due to a lack of funds available to vehicle manufacturers, given by the state. This has led to a cash crisis, the association said in July this year.
Meanwhile, business daily Donaye Eghtesad, citing executives, said this decline in automotive production in Iran could result in plant closures and layoffs, unless the government provides aid to the industry to the tune of US$1bn.
