After Sanctions

German Companies Hopeful in Iran

Iranians walk past a revolutionary mural in Tehran, Iran, January 17, 2016. REUTERS/Raheb Homavandi/TIMA ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. FOR EDITORIAL USE ONLY.
Iranians walk past a revolutionary mural in Tehran.
  • Why it matters

    Why it matters

    German companies are keen to take advantage of the business opportunities in Iran where infrastructure investments are needed.

  • Facts

    Facts

    • Trade sanctions have now been lifted on Iran after the United Nations confirmed it had reduced its nuclear program.
    • At the same time, twelve prisoners were exchanged between the United States and Iran.
    • Iran will hold parliamentary elections on February 26.
    •  
  • Audio

    Audio

  • Pdf

 

Following the weekend announcement that sanctions on Iran would be lifted, hopes are flourishing among German companies.

Daimler Trucks on Monday was among the first to make a concrete first step, announcing it had signed letters of intent for a joint venture to produce and sell vehicles in the country.

It was the first, early sign that the developments called for by Iran’s president Hassan Rouhani may be ahead. Mr. Rouhani had called in a television announcement last week for 2016 to be “a year of economic prosperity.”

This prosperity is a distinct possibility for the first time in almost two decades, as foreign investors look to enter or return to the country.

In its announcement, Daimler said it has signed letters of intent with Iran Khodro Diesel (IKD) and Mammut Group, a Dubai-based manufacturer and distributor of truck bodies. IKD is a subsidiary of Iran Khodro Industrial Group, the largest vehicle manufacturer in the region, which has cooperated with Daimler for more than 50 years.

The companies will cooperate with a joint venture to produce Mercedes-Benz trucks and powertrain components locally, Daimler said in a statement. They will also establish a sales company for Mercedes-Benz trucks and components.

Daimler Trucks plans to open an office in Tehran during the first quarter of 2016 and there are also plans for the company to return as a shareholder in the former engine joint venture Iranian Diesel Engine Manufacturing.

Both partners also hope to set up a joint venture for local sales of Mercedes-Benz commercial vehicles.

“Daimler commercial vehicles have always had an excellent reputation in Iran. And right now, there is a huge demand for commercial vehicles, especially trucks,” said Daimler board member Wolfgang Bernhard.

Daimler and Mayan, owned by Mammut Group, also signed a distribution agreement to sell Mitsubishi FUSO trucks in Iran, Daimler said.

Beyond the automotive sector, energy, food and pharmaceutical companies are all hopeful about doing business too.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.