Following the opening up of the Iranian market, Daimler Trucks is gearing up for a return to the Iran and has signed letters of intent with its local cooperation partners Iran Khodro Diesel (IKD) and the Mammut Group.
Daimler AG has already had business relations with IKD for the past 50 years including 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 JV Iranian Diesel Engine Manufacturing Co (IDEM). In addition to this, both partners are looking at establishing a JV 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.
Dr Wolfgang Bernhard, head of Daimler Trucks & Buses Division, commented, "Daimler commercial vehicles have always had an excellent reputation in Iran. And right now, there is a huge demand for commercial vehicles, especially trucks. We plan to quickly resume our business activities in the market there. The signing of the letters of intent with our local partners IKD and Mammut Group are important pre-requisites to resume business quickly."
High pent-up demand in Iranian truck market
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 US$ 415 billion in 2014. 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.
Professionalising sales and aftersales
The first Mercedes-Benz Actros and Axor trucks could be supplied to the country in the form of CKD (completely knocked down) kits before the end of the year. In addition to this, Daimler Trucks is pursuing the aim of establishing an even firmer foothold in the local market by revitalising the engine cooperation with IDEM and establishing a sales JV. Furthermore, Daimler Trucks is aiming to establish a sales joint venture to professionalise all sales and aftersales activities in Iran. Daimler Trucks likewise intends to open a representative office in Tehran during the first quarter of 2016. With these commitments, Daimler Trucks is therefore committed to assist with the country's economic and social development.
Selling Fuso truck along with Mayan Mammut Group
In addition to the plans for Mercedes-Benz trucks, Daimler Trucks says it also sees opportunities for Mitsubishi Fuso, especially in the light-duty-truck segment and models like the Canter. To open up this market, Daimler and Mayan have signed a distribution agreement for the Fuso brand. Mayan is part of the Dubai-based Mammut Group, which is one of the Middle East's largest truck bodybuilders and distributors.