The strategic cooperation between IKCO and Daimler AG for making two joint companies officially began with the signing of an MoU on Monday.
Daimler, the world’s largest truck producer, and IKCO as the biggest vehicle producer in the Middle East intend to establish a joint firm in order to enjoy each other’s advantages forming a pole for commercial vehicle production in the region.
The accord was inked by Daimler Trucks head Wolfgang Bernhard and Iran Khodro Industrial Group (IKCO) CEO and President, Hashem Yekeh-Zareh at the presence of top managers of the two giant vehicle producers.
Speaking at the meeting, Yekeh-Zareh said IKCO has taken up a totally new approach in its fresh round of international cooperation by emphasizing on joint ventures.
“The new round of collaborations is in line with maintenance and promotion of national interests,” noted the official adding “Daimler enjoys a long and successful history in Iran which can facilitate the improvement of the two sides.”
Wolfgang Bernhard, for his part, said “we have signed letters of intent with joint venture partners in Iran as part of the German truck maker's re-entry into the Iranian market following the lifting of international sanctions.”
“The company has been present in the market with Mercedes-Benz trucks and passenger cars since 1953, interrupted only by the sanctions phase between 2010 and 2016,” he underlined.
He furhter highlighted that "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."
Iran has opened up as an export market following years of economic isolation as world powers lifted sanctions in return for Tehran's compliance with a nuclear deal.
Daimler said it would cooperate with Iran Khodro Diesel (IKD) and Iran's Mammut Group, establishing a joint venture for local production of Mercedes-Benz trucks and powertrain components, plus the establishment of a sales company for Mercedes-Benz trucks.
Daimler Trucks intends to open a representative office in Tehran during the first quarter of 2016.
Mercedes-Benz commercial vehicles are still present there and remain very visible on Iran's roads and previously, Daimler sold up to 10,000 vehicles per year in Iran, most of them commercial vehicles.
The first Mercedes-Benz Actros and Axor trucks could be supplied to the country in the form of CKD (completely knocked down) kits or fully disassembled before the end of the year.
Iran Khodro Diesel is a subsidiary of Iran Khodro Industrial Group, the largest vehicle manufacturer in the Middle East and North Africa region, having more than 50-percent market share in Iran.
There exists a high pent-up demand in the Iranian truck market and Daimler company estimates that Iran needs to replace 56,000 commercial vehicles over the next three to five years.
Despite the sanctions, Iran was one of the largest national economies in the Middle East, with a GDP of $415 billion in 2014 where industry accounted for almost half of the economy.
HA/3027678