Effect of Localization on the Car Market Under Intense Sanctions; A System Dynamics Approach

In recent years, Iran’s economy has been under sever sanctions. The sanctions were increased by United Nations Security Council (UNSC) after 2012 which caused rapid changes in the price of all imported materials. As the result, price of the imported parts and materials of car manufacturing companies rapidly increased. After this sudden jump in the prices, the government decided to import technology and adjust it with regards to the economic, social, and political conditions of the country which is termed as technology localization. In this paper, we first propose a model describing effect of sanctions on Iran’s energy market and relate these sanctions to the market of car manufacturing companies. Then we model the effect of technology localization in stabilizing the car prices in long term.