Will establish a joint venture for local production of Mercedes-Benz trucks and powertrain components

Daimler Trucks has signed a letter of intent with local partners in Iran including Iran Khodro Diesel (IKD) and Mammut Group, as it plans to re-enter the Iranian market, reports Reuters. IKD is a subsidiary of Iran Khodro Industrial Group, an Iranian vehicle manufacturer, while Mammut Group is an industrial contracting company and manufacturer of trailers in the Middle East. As part of the strategic co-operation, the companies will establish a joint venture (JV) for local production of Mercedes-Benz trucks and powertrain components. They will also establish a sales company for Mercedes-Benz trucks. Daimler also plans to return as a shareholder in the former engine JV, Iranian Diesel Engine Manufacturing. The news report adds that Daimler will open a representative office in Tehran during the first quarter of 2016 and models like the Mercedes-Benz Actros and Axor trucks could be supplied as completely knocked down kits before the end of this year.
 

Significance: The Iranian vehicle market and industry have gained renewed interest from various automakers following the diplomatic breakthrough that resulted in the lifting of sanction. Daimler has also been reportedly looking for an Iranian partner to resume production in the country. Prior to the economic sanctions that were imposed as a result of the Iranian government's nuclear programme, Daimler had been an active participant in the Iranian automotive industry, forming its first partnership with Iran Khodro in 1969. Audi is also weighing the prospects of entering the market for the first time, following the lifting of international sanctions.

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