Nuclear deal paves way for Chinese cars en route to Iran

Baku, Azerbaijan, Oct. 5

By Fatih Karimov– Trend:

China, Iran’s traditional trade partner during the sanctions period, has successfully maintained its dominant share in Iran’s market even after the removal of the international sanctions, despite primary doubts in Iran about the future of the mutual economic cooperation.

The statistics by the Chinese Customs Administration approves that the country’s exports and imports have increased during the first eight months of the current year to materialize a trade turnover of $24.172 billion.

Iran’s statistics also confirms that China has maintained its position as the Islamic Republic’s main trade partner in the post-sanctions period.

Coming to the car sector, the Islamic Republic’s largest as far as non-oil goes, the latest statistics show that China is strengthening its share in the sector.

Iran's auto industry has been a major casualty of penalties imposed over the Islamic republic's nuclear program, with production plummeting and workers laid off because of the ensuing economic slowdown.

But the auto sanctions were lifted earlier in 2014 after an interim nuclear agreement was reached between Iran and world powers, raising the prospect of better times for the industry. At that time Iranian auto industry activists announced that cooperation with Chinese partners will not continue in the long run.

They said that cooperation with Chinese companies will continue in the short-term just to deal with the problem of joint venture and platform with leading European auto makers, who are still working to expand their share in Iran’s market via joint projects.

Saipa group, the country’s second biggest auto maker said in 2014 that Iranian carmakers will continue cooperation with China until 2021.

Meanwhile the five-month statistics (March-Aug, 2017) of Iran’s auto sector indicate that the Chinese car share in Iran’s market not even decreased but registered highest growth among the brands assembled in Iran.

Reviewing the statistics of Chinese Customs Administration unveils that export of motor vehicles and chassis to Iran was continuously in rise since the removal of the sanctions in 2014. ‎The figure was $490 million in 2013, but increased by 116 percent to over $1 billion in 2014 and continued rise to experience a value of $1.35 billion in 2016.

China’s Motor vehicles and chassis export to Iran in 2013-2016

The current year statistics also proves that the increasing trend of the exports continues. Iran has imported $1.4 billion worth of motor vehicles and chassis from China in Jan-Aug. 2017, almost two-time more than the imports in the 8-month period of 2016.

China’s Motor vehicles and chassis export to Iran in 2017

Akbar Mirza-Hosseini, car industry expert and the Vice-chairman of the board of directors at Iran's Rakhsh Khodro Diesel Company, believes that numerous obstacles to the production of spare parts have caused Iranian manufactures to turn to China’s low-quality products.

"A large group of Iranian producers simply import Chinese auto parts, repackage and distribute them under Iranian brands," he said, adding that some Iranian car makers have established offices in China to directly import auto parts.