1238 GMT February 21, 2018
Mahindra and Mahindra (M&M) has signed an agreement for collaboration with a local business group, which is expected to be materialized later this year, dnaindia.com reported.
Mumbai headquartered M&M already sells farm equipment, tractors and other products in the country.
When contacted, an M&M spokesperson said that the company has got into collaboration with Azim Khodro for imports and distribution of Mahindra vehicles in Iran.
"Iran is a highly competitive market and requires vehicles to conform to latest European vehicle regulations. Our products XUV500, KUV100 and the Mahindra Scorpio Pick-up were displayed at the Tehran Motor Show last November. These vehicles were well received and will be considered for the Iranian market, subject to further testing and validation, later in 2018," the spokesperson said.
The recent developments are not the only strategic step M&M has taken to enter the highly lucrative Iranian market.
It is reported that in May last year Mahindra Group-owned Pininfarina had signed a £70-million deal with Iran Khodro to produce a new modular '"platform which can accommodate at least four vehicles.
Pininfarina is an Italian designing and engineering firm. Pininfarina is reported to be involved in the entire process of getting the car to production, right from concept design to the final product.
Company sources said that Iran recently upgraded its emission norms for automobiles, which are on par with those in European nations.
Further, the country warrants a high degree of indigenization of the vehicles or else it attracts high custom import duties.
"It's a very challenging market, but at the same time offers huge opportunity for growth," said a company executive.
After oil and gas, the Islamic Republic's biggest sector is automotive industry as it contributes about 10 percent of GDP and provides employment for over four percent of the population.