Iran Tyre Industry On Revival Track

There is a cautious optimism on the economic horizon of Iran which is gearing up to emerge as a powerful economy in the Middle East following the progressive lifting of sanctions since January 2017. The Iranian tyre industry is also now looking forward to fresh investments, technology collaborations and joint ventures in a bid to reviving, modernising and expanding the industry. Yes, these are challenging times for the tyre industry in Iran, especially as uncertainty prevails in the country’s relations with the US.

As long years of economic isolation ended early this year, Iran is engaged in a cautious but ambitious bid to regain its status as a lucrative market in the Middle East region for many businesses, including the tyre business. Many international tyre manufacturers and allied companies are exploring the possibilities to enter the Iranian market while the domestic tyre industry is on the look out of financial, technological and other collaborations with foreign tyre majors in its bid to revive the industry.

But the road ahead is not that smooth either for the foreign tyre majors or the domestic industry. Managing the possible tough competition in the industry in the years ahead is certainly going to be a tough task.

Impact of sanctions

International sanctions imposed by the Western world have had its toll on Iran’s economy and also the country’s tyre industry. “The tyre market of Iran has been majorly hampered by the restrictions on the import and export of automobiles as well as tyres on account of sanctions imposed by P5+1 nations (France, the United Kingdom, Russia, China, the United States, plus Germany) due to Iran’s Nuclear Enrichment Programme,” says Karan Chechi, Research Director at TechSci, which has recently published a comprehensive report on the Iranian tyre industry, titled Iran Tire Market Forecast & Opportunities, 2021.

The Iranian tyre industry at present consists of nine to ten manufacturing companies with production capacity of 230,000 tonnes a year. Among local tyre companies, Barez Tire is the largest tyre manufacturer in Iran, followed by Dena Tire and Yazd Tire in 2014, according to Hassan Shaebani, CEO, Rubber Industries Engineering and Research Company (RIERCO). The country’s requirement for tyres is currently 330,000 tonnes annually, of which 230,000 tonnes are produced domestically and 100,000 tonnes met through imports.