Japan eyeing entrance into Iran's auto market

/By AzerNews/

By Sara Rajabova

After a favorable atmosphere emerged for foreign companies to operate in the Islamic Republic, automakers have shown a growing interest in entering Iran’s auto market.

Japan voiced interest in cooperating with its Iranian partners to manufacture cars and car parts in the Islamic Republic.

Hiroyuki Ishige, the head of Japan External Trade Organization said the company started its studies to implement the projects as soon as the grounds are prepared, Iran’s IRIB news agency reported on October 6.

JETRO is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world.

Ishige, who is in Tehran heading a Japanese trade delegation, further said Japan is ready to cooperate with Iranian companies in the fields of food, industry and environment.

He added that representatives from 30 major Japanese companies working in the oil, gas and petrochemical industries as well as carmakers, such as Mitsubishi and Suzuki, are in Iran to discuss expansion of bilateral economic relations with their Iranian counterparts.

Ishige also criticized Iran’s bureaucratic system and reported violations of intellectual property rights by companies in the Islamic Republic as the main obstacles blocking mutual cooperation.

He expressed hope that these obstacles will be removed as soon as possible.

Japanese companies are seeking to enter the Iranian market and reap the benefits of new cooperation.

Prior to the 1980s, Japan had a growing presence in the Iranian automotive sector, with brands such as Talbot and Datsun growing in popularity. Japanese cars are still considered reliable with limited breakdowns compared with others.

Trade between the two dipped significantly in recent years, though vehicles like Mitsubishi, Honda and Toyota continued to be imported even during the most stringent point of sanctions.

The trade balance between the two countries has historically been in favor of Iran, with cars being the major source of imports from the country. In 2010, Japan cooperated with Iran on several major projects when annual trade between the two states exceeded $11 billion at its height.

The volume of Iran-Japan trade stood at about $2.5 billion before imposition of sanctions against Tehran due to its disputed nuclear program, but fell to $ 240 million in later years.

The Islamic Republic and the P5+1group countries reached an agreement, also known as the Joint Comprehensive Plan of Action, curbing Iran’s nuclear program in exchange for the lifting of most international sanctions.

Following the deal, Iran’s former trade partners have started dispatching delegations to Tehran to study cooperation in the post-sanctions period.