Iranian Vehicles Market in 2025 slightly recovers towards year-end. Full-year figures gained 1.6% turning positive for the firs time in Q4. Iran Khodro gained leadership while MPM climbed into the top 5.
Economic Environment
In 2025, Iran’s economy has slipped back into contraction, with GDP shrinking by 0.6% including oil and 0.8% excluding oil in the first half of the year (starting March 21), despite modest 1.1% growth in the oil sector. Weak domestic demand, falling investment, and heightened uncertainty have driven sharp declines across the real economy, particularly in construction (-12.9%), industry and mining (-3.4%), and agriculture (-2.9%), pointing to a deepening recession. At the same time, inflation has surged, with point-to-point inflation reaching 52.6% in late December and food inflation soaring to 72%, severely eroding purchasing power as the rial collapsed to record lows near 1,420,000 per dollar.
These pressures have intensified political and economic strains for President Masoud Pezeshkian, whose proposed tight, deficit-averse budget, including a 20% public-sector wage increase well below inflation, has sparked backlash in parliament. While the government argues fiscal restraint is necessary to prevent further inflation and currency instability, critics warn the budget itself may worsen living costs, leaving households to absorb the burden of rising prices amid persistent currency volatility and collapsing confidence.
Automotive Industry Trend And Outlook
After the negative performance of 2024, Iran’s vehicle market continues to struggle throughout most of 2025. Still, Q4 posted mild recovery and full-year figures grew 1.6% overall.
Brand-wise, the leader became Iran Khodro (+22.7%) with a 33.3% share. Saipa fell into 2nd, down by 42% while Peugeot dropped 4.6% and ranked 3rd.
MPM rose 4 spots in 4th growing 1057.7% while ZAMYAD closed the top 5 (-32.1%)
In terms of models, the best seller was the Iran Khodro Samand (+10.6%) followed by the Saipa Quick (+31.4%).
Medium-Term Market Trend
Despite Iran’s production capacity and strategic influence in the Middle East, its automotive industry continues to struggle under the weight of international sanctions. The result is limited global integration and outdated technology, leading to significant hurdles for state-backed manufacturers like Iran Khodro and SAIPA, which supply the majority of vehicles sold locally.
The 2014 Geneva Agreement offered a temporary lift of some sanctions, enabling a period of market recovery. However, this progress was reversed when President Trump unilaterally withdrew from the deal and reinstated harsh sanctions, causing a sharp decline in sales. The market contracted dramatically, losing 23.1% of volume in 2018 and 33.6% in 2019, falling to just 793,735 units.
The COVID-19 pandemic did not hinder the Iranian vehicle market, instead, vehicle sales grew by 15.3% in 2020, followed by a 24% increase in 2022, once again surpassing the one million mark. However, this rebound was short-lived. In recent years, the market entered another phase of contraction due to a combination of rising inflation, currency devaluation, supply chain disruptions from tightened U.S. sanctions, and energy crises affecting industrial output. These factors culminated in a 4.7% market decline in 2024.
Tables with sales figures
In the tables below we report sales for Top 10 Models
