The US Treasury Department has expanded its economic pressure campaign against Iran with sanctions aimed at the country’s automotive, rail and metals industries, including its two largest vehicle manufacturers.
The measures, announced Thursday under Operation Economic Outcast, designate Iran Khodro Company and SAIPA Iranian Automobile Manufacturing Company. The two groups together produce nearly 1.5 million vehicles each year and hold a combined share of over 90% of Iran’s domestic passenger car market.
Iran’s automotive sector is its largest economic sector outside oil and gas. It also loses more than $1 billion annually through corruption and mismanagement, according to the information accompanying the sanctions announcement.
The Trump administration has presented the measures as part of a wider effort to apply economic pressure on Iran. Operation Economic Outcast began in late August.
Treasury Secretary Scott Bessent said the campaign had weakened Iran’s capacity to finance military activity and terrorism. “The Iranian regime's ability to fund its war machine and inflict terror on the world has been severely diminished thanks to Operation Economic Outcast,” Bessent said in a statement.
The designations extend beyond the two passenger-vehicle manufacturers. Iran Khodro Diesel Company, an Iran Khodro subsidiary, was also targeted. The company is Iran’s largest producer of buses, trucks and diesel engines.
Niroo Motor Shiraz Industrial and Manufacturing Company, described as Iran’s largest motorcycle manufacturer, was included as well. The sweep therefore covers producers across several parts of Iran’s transport manufacturing industry.
Treasury also designated three Iranian rail companies: the state-owned Islamic Republic of Iran Railway Company, Raja Passenger Trains Company and a private freight company. The information released with the announcement did not identify the private freight company by name.
The action reaches companies outside Iran that Treasury says support the country’s automotive sector. Those designated include PT Golden Motorcycle International, which is based in Indonesia; Integrated Auto Parts LLC, based in the UAE; and Troy Trading Arac Parcalari Sanayi Ve Ticaret Limited Sirketi, based in Turkey.
Hessenberg Co., Limited and Tanex Global Trading Hong Kong Limited, both based in Hong Kong, were also designated. The inclusion of overseas firms shows that the Treasury action is directed at international businesses involved in trade in automotive parts and vehicles connected to Iran’s sector.
Treasury said the sanctions also cover companies in Iran’s metals industry, though the full list of those companies was not set out in the material provided. Heavy Equipment Production Company is one of the Middle East’s largest manufacturers of mining and road construction machinery.
The measures focus on industries of broad importance to Iran’s domestic economy. The two largest automakers dominate the passenger-car market, while the rail designations cover state-owned and passenger rail operations as well as private freight activity.
The announcement did not specify the expected effect on Iran’s wider economy. It also gave no details of further measures that may be planned under Operation Economic Outcast, and no international response to the sanctions was included in the information released.
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