EVOLUTION IN THE GEOGRAPHICAL STRUCTURE OF THE TRANSNATIONAL CORPORATIONS THROUGH GLOBAL PRODUCTION NETWORKS IN THE CASE OF THE AUTOMOTIVE INDUSTRY OF IRAN
DOI:
https://doi.org/10.29121/ijetmr.v12.i7.2025.1558Keywords:
Automotive Industry, Geopolitical Obstacles, Less-Developed Country, Gpns, IranAbstract
Iran's automotive industry, a key economic driver contributing significantly to GDP and employment, has been consistently challenged by geopolitical factors, particularly economic and political sanctions. Despite being one of the top 20 vehicle manufacturers globally, the industry has faced severe impacts from Western sanctions. Nevertheless, Iran has maintained its production levels by strategically shifting its trade policies. Initially, the industry pivoted away from Western partnerships, strengthening ties with China, its primary East Asian trade ally. As sanctions intensified, Iran further diversified its trade network, focusing on Persian Gulf neighbors, Central Eastern Europe, and other sanctioned countries like Russia and Venezuela. These partnerships have been crucial in sustaining vehicle production through completely knocked-down and semi-knocked down imports. Domestically, the industry has faced growing criticism over the low quality and high prices of locally produced vehicles, prompting a potential shift in policy. The government is now considering lifting bans on foreign and second-hand car imports, indicating a move away from strict autarky towards a more open market. This evolution in trade policy and international cooperation underscores the adaptability of Iran's automotive sector and its efforts to maintain its global standing despite persistent geopolitical challenges.
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