Despite recent incentives adopted by the government to boost sales for the domestic auto industry, recent reports indicate auto production is on the decline.

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A report issued by the Iranian Automobile Manufacturers’ Association indicates that car production has fallen by 42 percent compared to last year.

The report indicates that Iran Khodro production has fallen by 48.2 percent and Saipa has seen a 35-percent decline.

This summer, the Iranian automotive industry was faced with a lack of demand following a public campaign to boycott domestic cars because of their high prices.

That sparked a government program that gives loans of up to 25 million toumans car purchases, which reportedly boosted car sales for a short period: 110,000 cars sold within six days.

Experts say, however, that the government incentive was just a short-term solution and car manufacturing companies remain severely in debt.