The Bosch Group is opening a new regional presence in Tehran, the capital of Iran. By the end of the year, the Group will employ around 50 associates in the Middle Eastern country, including all business sectors. The German technology supplier first began selling its products in the country in 1924.
Uwe Raschke, board of management member responsible for Europe, Middle East and Africa, Bosch commented, “We are delighted to be back in Iran. In our quest to pick up speed quickly, we are benefiting first and foremost from reestablishing contact with former local partners and customers. The country’s potential is tremendous. We expect to see the Iranian economy grow by just under five percent this year. The medium term is also highly promising.”
As per Bosch, Iran is one of the most promising markets in the Middle East with more than half of the nearly 80 million population being under 25 years old and highly educated. Just over 20 percent of the country’s population lives in the Tehran area, an economic region with a rapidly developing IT infrastructure. Moreover, the Iranian government also plans to invest more than US$ 40 billion (Rs 266,842 crore) in local infrastructure, such as expanding airports, rail networks, and energy supply.
“We can support the country’s modernisation process with a wide range of products and solutions, including mechanical engineering applications, solutions for connecting infrastructure and energy and building technology, as well as innovative household appliances and power tools,” Raschke said.
Growing automotive market
Bosch will also be present in Iran with its range of products and solutions from the Mobility Solutions business sector. The company sees great potential in Iran’s growing vehicle market: this year, more than one million vehicles are expected to be produced locally, 9 percent more than last year. The country’s outdated fleet also means that the need for investment is high, especially in the commercial-vehicle segment. Many trucks have already been on Iran’s roads for 40 years or more.
Strong growth in the Middle East
Apart from re-entering Iran, Bosch has also recently opened a sales office in Lahore, Pakistan. The activities in Iran and Pakistan as well as in 14 further countries in the Middle East will be coordinated by the regional subsidiary in Turkey. In 2015, the company generated sales of € 1.9 billion in the region, including Turkey, corresponding to a considerable increase compared to 2014. The company generated sales of nearly € 1.5 billion in Turkey itself last year and employs 16,600 associates.
“Turkey plays a prominent role in our growth strategy in the Middle East,” Raschke said. Within a period of two years (2015 and 2016), the company is investing around half a billion euros, above all in expanding local manufacturing and engineering. Bosch also opened a new regional headquarters in Istanbul in 2015.
A number of companies have announced re-entering the Iranian market after sanctions were partially lifted in January this year. Daimler entered the Iranian commercial vehicle market after it signed letters of intent with its local partners in January. Axalta Coating Systems is also mulling over an entry in Iran. The biggest development was announced last month as India proposed an investment of US$ 20 billion (Rs 132,900 crore) in Iran’s Chabahar port, either through joint venture between Indian and Iranian public sector companies or with private sector partners.
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