The Iranian vehicle manufacturer is looking to tie up with foreign companies ahead of sanctions being lifted
The Iran Khodro Industrial Group (IKCO) hopes to sign a manufacturing agreement with Daimler AG given international sanctions look set to be lifted, it said in a statement.
According to Hashem Yekke Zare, chief executive of IKCO, Iran’s hard times have come to an end and many foreign companies are now looking at doing business with the vehicle manufacturer.
IKCO hopes to sign a ten-year agreement with Daimler to produce trucks and buses in Iran, Yekke Zare was quoted as saying. The German automotive giant once partnered with IKCO, but the imposition of sanctions ended trade relations, he added.
Daimler has however remained tight-lipped on the specifics of any talks with IKCO, according to media reports. But the auto-maker is looking to make a comeback in the Iranian market, a senior executive said recently.
“The position for us in terms of trucks and cars and our broad portfolio is a good one,” said Daimler Chief Financial Officer Bodo Uebber, quoted by Bloomberg. “It’s too early to say how far that can be, but of course we are in contact with our business partners to have discussions how to restart.”
Daimler pulled back from business in Iran in 2010 amid rising political tensions, giving up a 30% stake in Iranian Diesel Engine Manufacturing (a joint venture with IKCO) and withdrawing plans to export three-axle trucks. However, according to Bloomberg, it has now joined the ranks of other European carmakers like Volkswagen AG considering a return to the Islamic Republic – a market that could average 1.7 million vehicles in annual sales in the longer term, as per estimates from IHS Automotive.
Commenting on future plans for IKCO, Yekke Zare said the company will undertake production abroad if it finds a reliable private sector partner.
“In Azerbaijan, a company has expressed its willingness to cooperate with us. We have reached a conclusion on some issues. After talks are finalized, we will begin our export to the country,” the chief executive said.
A nuclear deal between Tehran and six world powers in July raised the prospect of banking and trade sanctions on Iran being lifted, likely around the end of this year.