Iranian, German carmakers sign co-op document

Business Materials 18 January 2016 17:29 (UTC +04:00)

Baku, Azerbaijan, Jan. 18

By Umid Niayesh - Trend:

Iran's leading carmaker Iran Khodro and Germany's giant car manufacturer Daimler AG signed a Memorandum of Understanding (MoU) for cooperation, following removal of international sanctions against the Islamic Republic.

Based on the document, which was signed by Wolfgang Bernhard, head of Daimler Trucks and Hashem Yekeh Zareh, the CEO of Iran Khodro Industrial Group (IKCO) on Jan. 17, the two carmakers will establish a joint company, Iran's Mehr news agency reported Jan. 18.

The parties announced in a joint statement that making joint investments for producing trucks, forming a joint company for selling Mercedes trucks and their parts in Iran, and the purchase of shares of Vehicle Axle Manufacturing Co. (VAMCO) and Iranian Diesel Engine Manufacturing (IDEM) by the German company are among the agreed topics.

Daimler will re-open its office in Tehran within the first three months of 2016, according to the agreement.

The German company also expressed readiness to start the production of Actros and Axor trucks in Iran during the current year.

Earlier, Yekeh Zareh said the German company would purchase 30 percent of the IDEM shares to produce cars in the city of Tabriz, adding that Mercedes-Benz would sign a 10-year agreement to produce trucks and buses in Iran.

Last November, Mohammad Hazrati, export manager at the Iran Khodro Diesel, told Trend that the IKCO continues to manufacture previous versions of engines and will continue to support these products, stressing that joint manufacturing of new versions of engines for commercial cars will become a priority during the post-sanctions period.

Iran is one of the biggest countries in the region in terms of production of cars.

The 2014 production statistics by the International Organization of Motor Vehicle Manufacturers (OICA) shows that Iran's auto production increased by 46.7 percent in the 12-month period. The figures indicate that the Iranian carmakers produced 1,090,846 cars and commercial vehicles last year.

Iran produced 989,110 cars in 2012, which made the country Asia's eighth largest car manufacturer. Iran also ranked 18th in the world the same year.

The Islamic Republic's car output faced a 40-percent decrease in 2012 due to international sanctions.

The country was Asia's fifth largest car manufacturer in 2011, with a total output of 1,648,505.