Economy, Auto

Troubled VW Pursues Iran Plans

Troubled VW Pursues Iran PlansTroubled VW Pursues Iran Plans

Volkswagen officials have visited Iran this week to discuss possible joint projects with local carmakers, according to a report broadcast on Iranian television.

The German car manufacturer has officially sent representatives to Iran with Olaf Lies, regional minister of economic affairs, labor and transport of the federal state of Lower Saxony, where VW is headquartered.

Their visit suggests VW's determination to press on with its plans in Iran despite fallout from revelations that VW had fitted 11 million diesel vehicles around the world with devices designed to mask the level of emissions. This is not an issue in Iran, as diesel cars are banned.  

Volkswagen’s last venture in Iran involved the production of Gol compact with Iran’s Kerman Khodro before withdrawing under US pressures back in 2011.

The company's officials also accompanied German Economy Minister Sigmar Gabriel in a July visit to Iran along with representatives of Daimler, Siemens, Linde, BASF and GIZ.

Last month, a VW official said the group was preparing its Skoda brand for the Iranian market of 80 million people who bought 1.1 million cars last year. The original report said VW is preparing Skoda for entry to the local market, but in an email to the Financial Tribune, Skoda's representative denied seeking market entry.  However, Skoda Auto's communications chief, Tomas Kubik, said Iran is a very attractive market, but no decision has been taken so far for doing business in Iran.

Meanwhile, VW brand R&D chief Heinz-Jakob Neusser said, "Iran is a very interesting market with great opportunities."

On Saturday, Lies met with officials of Tehran Chamber of Commerce, Industries, Mines and Agriculture, saying German companies are interested in resuming cooperation with Iran following the removal of US and European sanctions.

“Iran is one of the most important economies of the Middle East and North Africa region, which was also among our biggest partners before sanctions,” Tasnim News Agency quoted him as saying.

“Iran played an important role in forging ties between Germany and the regional countries. We are happy the way it has reopened for joint cooperation again,” he said.

Which German cars would enter is not clear, but in view of the tight Iranian economic conditions and the preferable price range, it is likely that cheaper models would be prepared for entry.