Iran’s Motorcycle Market Revival in 2023, Predominantly Supplied by Chinese Manufacturers
After experiencing a significant downturn over the past decade, the Iranian motorcycle industry is now gradually rebounding, predominantly fueled by Chinese motorcycle manufacturers.
Genesis and Market Trends of Iran’s Motorcycle Industry
The birth of the Iranian motorcycle industry traces back to the late 1340s in the Iranian calendar, equivalent to 1961 AD. Concurrently, the foundation of Iran’s modern industries was established. By 2006, Iran had positioned itself as one of the world’s top four motorcycle markets, boasting annual sales surpassing 1.5 million units. Motorcycles had become the preferred mode of transportation locally. The flourishing of Iran’s motorcycle industry was further propelled by joint ventures between foreign and domestic manufacturers. Presently, a majority of motorcycles available in Iran are manufactured in China. Due to a combination of prolonged economic downturns, inflation, government policies such as the prohibition of carburetor motorcycle numbering, transitions from Euro 4 to Euro 5 standards, and mandates that 10% of factory output be dedicated to electric motorcycles, sales plummeted to a nadir in 2018, dropping to a mere 100,000 units annually.
Post this slump, the Iranian market has been striving for recovery. The pandemic-induced reduction in public transportation coupled with an uptick in personal vehicle usage, expansion of local exhibitions, and burgeoning superstores, coupled with the prohibitive costs of automobiles, has led to a gradual market resurgence. Starting from the low point in 2018, there was a growth of 15% in 2020 compared to the previous year.
According to Iranian media IRNA, approximately 373,662 motorcycles were manufactured during the 10 months from March 21, 2022, to January 20, 2023. In contrast, IRIB reported a production of 198,087 units in the same period the previous year, marking an astounding 89% surge!
The potential of the Iranian market approaches 1 million units. If the government can craft and honor new nuclear project agreements, it could usher in substantial opportunities for the motorcycle sector.
Current State of the Iranian Motorcycle Industry and Emission Standards
Tehran ranks among the cities with the most severe pollution globally, with outdated motorcycle technologies being a pivotal contributor. Owing to their affordability, convenience, and ease of maintenance, there are over 11 million motorcycles in Iran (with more than half in the capital) used for both passenger and freight transportation.
It’s estimated that nearly 5 million motorcycles should be decommissioned due to their high carbon dioxide emissions. As of 2016, over 245 local manufacturers were producing an array of unregulated lightweight motorcycles, which, despite being cost-effective, pose substantial health risks.
When the government implemented emission restrictions on motorcycles for the first time in 2016, the new regulations led to the shutdown of 85% of local manufacturers. This cleared the stage for dominant imports, primarily from India and China, via the CKD (Complete Knock-Down) route.
However, new sanctions targeting Iran’s nuclear policies in 2019 thwarted Indian manufacturers (then the leading importers) from accessing the Iranian market, thus shifting the market predominantly into the hands of Chinese manufacturers.
Worth noting is the 2018 ministerial conference decision that carburetor-fueled motorcycles have a decommissioning timeframe of 6 years, fuel-injected motorcycles 8 years, and electric motorcycles 12 years.