Daimler Trucks announced it has signed letters of intent with local cooperation partners Iran Khodro Diesel (IKD) and the Mammut Group to return to the Iranian market.
Daimler AG has had business relations with IKD, a subsidiary of Iran Khodro Industrial Group, the largest vehicle manufacturer in the Middle East and North Africa (MENA) region, for more than 50 years.
The areas of cooperation include a joint venture for local production of Mercedes-Benz trucks and powertrain components plus the establishment of a sales company for Mercedes-Benz trucks and components. Furthermore, there are plans for Daimler to return as a shareholder in the former engine joint venture Iranian Diesel Engine Manufacturing Co. (IDEM). In addition, both partners are looking at establishing a joint venture for local sales of Mercedes-Benz commercial vehicles.
With its growth potential following many years of sanctions and the pent-up demand in the transport sector, Iran offers promising opportunities for Daimler Trucks, the company said. Despite the sanctions, Iran was one of the largest national economies in the Middle East, with a nominal gross domestic product (GDP) of US$415 billion, Daimler said. The Ministry of Industry, Mine and Trade estimates that about 200,000 commercial vehicles will be replaced in the coming years – some 56,000 of them in the next three to five years alone.
Daimler said the first Mercedes-Benz Actros and Axor trucks could be supplied to the country in the form of CKD (completely knocked down) kits before the end of the year. In addition to this, Daimler Trucks is pursuing the aim of establishing an even firmer foothold in the local market by revitalizing the engine cooperation with IDEM and establishing a sales joint venture. Furthermore, Daimler Trucks is aiming to establish a sales joint venture to professionalize all sales and after-sales activities in Iran. Daimler Trucks likewise intends to open a representative office in Tehran during the first quarter of 2016. With these commitments, Daimler Trucks is therefore committed to assist with the country's economic and social development.
In addition to the plans for Mercedes-Benz trucks, Daimler Trucks said it also sees opportunities for Mitsubishi Fuso – especially in the light-duty-truck segment. To open up this market, Daimler and Mayan, a part of the Mammut Group, have signed a distribution agreement for the Fuso brand. The Dubai-based Mammut Group is one of the Middle East's largest truck bodybuilders and distributors. Mayan will be responsible for opening up the Iranian market in close cooperation with Fuso.