Daimler Trucks is setting the course for a return to the Iranian market, having signed letters of intent with its local cooperation partners Iran Khodro Diesel (IKD) and the Mammut Group.
Daimler AG have already had successful business relations with IKD for the past 50 years. IKD is a subsidiary of Iran Khodro Industrial Group, the largest vehicle manufacturer in the MENA region having more than 50% market share in Iran and has been cooperating with Daimler for over half a century.
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 to this, both partners are looking at establishing a joint venture for local sales of Mercedes-Benz commercial vehicles. Daimler and IKD are about to benefit from each other’s competitive advantages to satisfy the large demand for trucks. In the short term, therefore both parties have a strategic alliance on a win-win basis through joint ventures in their scope.
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. Despite the sanctions, Iran was one of the largest national economies in the Middle East, with a nominal gross domestic product (GDP) of 415 billion US dollars in 2014.
Industry accounts 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 in the coming years – some 56,000 of them in the next three to five years alone.