0239 GMT June 22, 2018
The deal between Iran Khodro and Mercedes-Benz Trucks includes creating a joint company that provides sales and after-sale services in the Islamic Republic.
According to the report, a second deal would be also signed next month to create a joint venture in Iran for production of heavy vehicles including Actros trucks.
French PSA – the maker of Peugeots and Citroens – and rival Renault have pushed hard into Iran since its 2015 deal with world powers that saw international sanctions lifted in return for modification on Tehran’s nuclear activities.
PSA has signed production deals worth €700 million ($768 million), while Renault has announced a new plant investment to increase its production capacity to 350,000 vehicles a year.
Daimler also plans to return as a shareholder in the former engine joint venture Iranian Diesel Engine Manufacturing Co. (IDEM) based in Tabriz to build diesel engines. The German company has said it intended to buy 30 percent of shares which it had sold in IDEM.
The company has a long track record in Iran with a business dating back to the 1950s, where it sold up to 10,000 vehicles a year.
There is a high pent-up demand in the Iranian truck market, where the country is estimated to replace 56,000 commercial vehicles over the next three to five years.
According to Iran’s Ministry of Industry, Mine and Trade plan, about 200,000 commercial vehicles will be replaced in the coming years.