January 18, 2016 / 3:13 PM / 4 years ago

Truck maker Daimler signs agreement to return to Iran

FRANKFURT (Reuters) - Daimler (DAIGn.DE) on Monday said its trucks division had 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.

A emergency exit sign is pictured above a logo of German car manufacturer Daimler AG, before the annual news conference in Stuttgart February 18, 2010. REUTERS/Johannes Eisele

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 deal to curb its nuclear ambitions.

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.

Furthermore, there are plans for Daimler to return as a shareholder in the former engine joint venture Iranian Diesel Engine Manufacturing Co. (IDEM).

Daimler Trucks intends to open a representative office in Tehran during the first quarter of 2016, the Stuttgart, Germany-based company said.

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, Daimler said.

In addition to the plans for Mercedes-Benz trucks, Daimler Trucks also sees great opportunities for its Mitsubishi FUSO brand – especially in the light-duty truck segment.

To open up this market, Daimler and Mammut have signed a distribution agreement for the FUSO brand.

Daimler can build on a long and successful history in Iran: 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.

Mercedes-Benz commercial vehicles are still present there and remain very visible on Iran’s roads. Previously, Daimler sold up to 10,000 vehicles per year in Iran, most of them commercial vehicles.

A spokeswoman for Mercedes-Benz passenger cars said the luxury auto maker was preparing to re-enter Iran’s market, but said it was too early to provide details about how this would happen.

Rival BMW said: “Entry into the Iranian market at a future date will depend on political and economic developments.”

A spokesman for Opel, a unit of United States auto maker General Motors (GM.N), said: “U.S. sanctions continue to place significant limits on GM and its non-U.S. operations. Accordingly, our position toward trade with Iran remains unchanged.”

Reporting by Edward Taylor and Irene Preisinger; Editing by Christoph Steitz, Mark Potter and Adrian Croft

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