Volkswagen returns to Middle East’s biggest car market – Iran

Posted on Jul 11, 2017 by

Seventeen years after pulling out of Iran, German carmaker is making a return to the most lucrative car market in the Middle East


Iran’s government foresees a doubling of its car market, to three million vehicles sold per year

After 17 years of absence German carmaker Volkswagen is returning to Iran, entering the Middle East’s biggest car market with local partner Mammut Khodro.

Volkswagen will start selling its crossover Tiguan and Passat saloon models from next month in Iran, a market that’s worth over one million cars annually, peaking as high as 1.6 million in 2011.

The German company has a long history in the Middle Eastern country, with the ubiquitous Beetle a common sight on Iranian roads as early as the Fifties, followed by the Bulli in the Sixties and later on by the Gol hatchback (also made in Brazil). Due to international sanctions Volkswagen withdrew from the country in 2000, but with the recent lift of the economic sanctions the Wolfsburg-based carmaker is looking to benefit from some strong projections.   


Iran’s official importer of Volkswagen vehicles is privately-owned Mammut Khodro

According to Volkswagen, the Iranian government estimates a doubling of its automotive market with projections of three million car sales per year in the medium to long term.

Volkswagen is joining the French carmakers — , Citroën and — who returned to Iran in 2015 and already have a head-start on gaining valuable market share in the country. is planning to increase its local production capacity to 350,000 vehicles annually, and last year Peugeot-Citroën committed $330 million (AED1.2 billion) towards a new Iranian factory.


Last year Citroën’s higher-end DS brand launched its first store in Tehran, Iran

Reuters reports the car market in Iran is already showing signs of meeting those government projections, as sales jumped 50 percent in the first quarter of 2017 compared to the same period last year. Volkswagen will hope the Iranians rather like their Tiguans and Passats.

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