Why the Auto Industry Matters

Aided by partnerships with automakers from France, Japan, Korea, Italy and Germany, Iran has doubled its automotive production since 2005.[1]  And in spite of economic sanctions, Iran’s auto industry continues to experience positive growth, according to a December 2011 report by Business Monitor International (BMI).[2]  Iran’s automotive industry represents 10% of Iran’s GDP, making it the country’s second largest industry behind its oil and gas sector. In 2012, Iran will produce more than 1.4 million automobiles, making it the largest automaker in the Middle East. [3, 4, 5]

Iran's auto industry is dominated by the Iranian regime and the Islamic Revolutionary Guard Corps (IRGC), which serves as caretaker of Iran’s ballistic missile and nuclear weapons programs and is the key instrument used to suppress Iran’s internal pro-democracy movement.[6] Iran’s two largest automakers, the Iran Khodro Group and the Saipa Group, are both subsidiaries of the Iranian Development and Renovation Organization (IDRO), an Iranian government body that also controls companies involved in developing the regime’s nuclear and missile programs. IDRO is sanctioned by both the United States and EU.[7] Iran’s third largest auto-manufacturer, the Bahman Group, is 45.5% owned by the IRGC.[8]

In addition to the economic and financial support that is afforded to the Iranian regime by the auto industry, the sector also provides direct material capabilities to Iran’s military, and various paramilitary organizations connected to the regime. Trucks produced by companies like Volvo (shown above) are used to transport heavy artillery and military personnel and are abused as instruments to suppress Iran’s pro-democracy movement