Truck manufacturer, Daimler Trucks, have signed letters of intent with its Iranian partners, Iran Khodro Diesel (IKD) and the Mammut Group, to return to the Iranian market.
The cooperation will include a joint venture (JV) for local production of Mercedes-Benz trucks and powertrain components along with the establishment of a sales company for Mercedes-Benz trucks and components.
There are plans for Daimler to return as a shareholder in the former engine JV Iranian Diesel Engine Manufacturing Co. (IDEM).
Daimler and IKD are set to benefit from each other’s competitive advantages to satisfy the large demand for trucks.
Dr Wolfgang Bernhard, member of the board of management at Daimler AG responsible for Trucks and Buses, said: “There is a huge demand for commercial vehicles, especially trucks, in Iran. We plan to quickly resume our business activities in the market there. The signing of the letters of intent with our local partners IKD and Mammut Group are important pre-requisites to resume business quickly.”
The nation’s pent-up demand in the transport sector offers promising opportunities for Daimler Trucks. With an increasing potential following many years of sanctions, Iran has been one of Middle East’s largest national economies. Iran’s nominal GDP in 2014 was $415bn, with industry sector accounting for almost half of the Iranian national economy.
The Ministry of Industry, Mine and Trade estimates that about 200,000 commercial vehicles will be replaced the upcoming years, with 56,000 of them in the next three to five years.