Joint investment in the form of joint venture is a way for the transfer of technology, management skills and knowhow, as well as development of products, widely used in the world auto industry in order to reap the benefits of economy of scale, reduce costs, etc. In this context, one of the most important questions to be answered in conclusion of joint venture contracts is the orientations and approaches that must be considered.

To attract foreign investment in auto industry, the Government in Brazil grants to foreign investors such advantages as " low interest loans with repayment period longer", "facilitated access to land and infrastructures needed for the establishment of factory" and "up to 30% tax reliefs for domestic production". On the other hand, and in order to protect the domestic auto industry, a number of requirements have been imposed on foreign automakers, including "promotion of research and development activities in the fields of engineering, basic industrial technologies and empowering Brazilian suppliers", "commitment to increase local content from 45% to 70% by 2017" and "compensation of damages in case of early termination of the contract".

China has also adopted a series of incentive policies to attract foreign investment in auto industry, the most important of which include "granting sufficient access to credits of state-owned banks" and "implementing preferential policies such as tax exemptions". In order to protect domestic production and improve product quality, the Chinese Government has imposed on foreign automakers a number of requirements including 1. Conclusion of contract with a Chinese partner, with the foreign partner's share of the property not to exceed 50 percent; 2. Obtaining approval of the Central Government; 3. Concluding maximum two joint venture contracts per group of vehicles by foreign processors; 4. Maintaining local content at more than 40% in the first year of production and increasing the figure to 60 and 80 percent respectively in the second and third years of activity; and 5.  Imposition of uncompromising conditions for the withdrawal of money in case the foreign partner changes their decision regarding the joint venture.

Based on the above mentioned, the following policies are recommended in regard with joint venture contracts in Iranian auto industry: requiring minimum levels of local content in production and adopting regulations necessary to guarantee the enforcement of these requirements; requiring foreign investors to allocate, at the time of conclusion of the contract, certain percentage of total output for exportation; Setting restrictions on maximum share of foreign auto makers in joint venture contracts and adopting legislation to appropriately forfeit the early withdrawal of the investment from Iran; increasing the duration of contracts, aiming at extending time required to set up joint research and development centers and transferring technology and management skills and knowhow.