Snapping into gear

We need more cars

TEHRAN’S clogged streets hint at one industry poised to profit from the lifting of some sanctions on Iran after a deal to curb its nuclear programme. Foreign manufacturers are set for a race into Iran to take advantage of a car-hungry population of nearly 80m. Its huge domestic market is the largest in the Middle East after Egypt’s.

The timing of Iran’s re-opening is a boon for the world’s big carmakers. Sales in America are at or near a peak and Europe’s rapid rebound may be coming to an end. Meanwhile big emerging markets such as China and Brazil are slumping. Sanctions hit Iran hard. Vehicle sales, which hit a peak of 1.6m in 2011, halved by 2013 as sanctions tightened. Then, as relations thawed, the market grew steadily again. It should surpass 1.3m vehicles this year before bouncing back to 1.6m by 2016, according to IHS, a consulting firm.

French carmakers, once the market leaders in Iran, are seeking to re-establish their grip. PSA Peugeot Citroën, which alone accounted for around a third of sales in 2011, and Renault are well-placed, given their pre-sanctions presence, to join...

from The Economist: Business http://ift.tt/1McShsu