The lifting of international sanctions paves the way for the return of major truck producers to Iran's commercial vehicles market, though some maintained a low-key presence in the market even after sanctions were imposed on the country.
Earlier last week, representatives from Germany's Daimler and Sweden's Volvo and Scania last month held talks with heavy-commercial-vehicle producers and the Ministry of Roads and Urban Development officials to help the country renovate its cargo transport fleet.
Mercedes Axor truck is one of the brands expected to enter the domestic market.
Decades-old trade and financial restrictions were lifted against the Islamic Republic on Jan. 16, six months after the country reached a watershed deal with six world powers (the five permanent members of the United Nations Security Council plus Germany) on getting sanctions relief against temporary curbs on its nuclear program.
The implementation of the nuclear deal, officially known as the Joint Comprehensive Plan of Action, has helped Iran reestablish links to the global financial and banking systems. It allows Iran to attract foreign investments and knowhow, apart from engaging in joint ventures and deals with international companies.
According to a report by Roads Ministry, the country needs 15,000 new trucks each year to renovate its fleet.
"More than 4,000 cargo transport companies are active in Iran, carrying over 380 million tons of commodities nationwide per year. In addition, some 860 companies transport over 4.6 million tons from domestic ports to destinations in European, Central Asian and neighboring countries," the report said.
The ministry is offering "appropriate conditions for selling or leasing, and getting banking facilities with a convenient repayment period" to attract investment in the sector.
"Having prepared the framework based on Iranian laws, the Roads Maintenance and Transportation Organization—affiliated to the ministry—announced readiness to collaborate with potential partners that present the best plans," it added.
Contrary to their Chinese competitors, the above-mentioned companies are favored by drivers and fleet owners, as they offer top quality builds, good fuel economy and highly liquid when it comes to selling. Iran Khodro Diesel (the largest auto producer in the Middle East), Saipa Diesel (Iran's second largest auto group) and Mammut Group have been selling, respectively, Mercedes-Benz, Volvo and Scania in recent years.
But as much as the European-derived trucks in Iran appear similar to those in Europe, there are some stark differences when it comes to cabin fixings and technology.
Features like automation, drivers' sleep alerts and high-tech communications systems, which could reduce both the risk of accidents and drivers' labor, are omitted from the local offer ings.
With the final price being a key issue, many in the industry try to get the brand as cheap as possible.
Automakers are not to be blamed for this. These options create a huge difference in the final price—sometimes up to 2 billion rials ($66,500).
However, no-frills base models are priced at 4 billion rials ($135,000) on average. Since these vehicles are mostly purchased by drivers instead of transport companies, the price-tag of 4 billion rials is still too expensive for truckers.
However, if full-option models were offered on easy terms, they can remarkably contribute to better driving standards as owners would take extra care not to put such valuable assets at risk.
The Roads Ministry, as the supervisor of road transport fleet, should adopt a more serious approach when it comes to the road fleet, because fleet renovation is not merely aimed at reducing fuel consumption and air pollution.
Advanced technology, increased credit facilities and high quality vehicles can bring about a dramatic change in this industry. Then alone can we expect to see a decline in the mortality rate of drivers and loss of assets.
Subsidies could lift truckers' purchasing power to help buy full-option vehicles and would be a sensible measure to enact. However, it would be a waste of resources if it fails to provide them with features that can increase efficiency and safety, something that are currently conspicuous by their absence.
