Economy, Auto

IKD Expects Wider Cooperation With Daimler

IKD Expects Wider Cooperation With Daimler IKD Expects Wider Cooperation With Daimler

The new round of cooperation between Iran Khodro Diesel, the industrial subsidiary of the largest carmaker Iran Khodro, and German giant car manufacturer Daimler AG will focus on manufacturing new engines in Iran, export manager of Iran Khodro Diesel said

Mohammad Hazrati also told Azerbaijan’s Trend News Agency that Daimler is Iran’s traditional partner, adding that Iran Khodro Diesel had started negotiations with the German company and widespread cooperation is expected after sanctions are removed. Earlier, Hashem Yekezare, CEO of Iran Khodro Industrial Group (IKCO), claimed that the German company would purchase 30% of Iranian Diesel Engine Manufacturing’s shares to produce autos in the city of Tabriz.

“Mercedes-Benz would sign a 10-year agreement to produce trucks and buses in Iran,” he said.

Hazrati noted that IDEM and Daimler AG have been partners since 1969, but this relationship was interrupted when the German company left Iran during the period of sanctions placed on the country by the US and European Union.

“IKCO continues to manufacture previous versions of engines and will continue to support these products,” he said, stressing that the joint manufacture of new engines for commercial cars will become a priority during the post-sanctions period.

Hazrati noted that the manufacture of new versions of these engines had been planned four or five years ago, but these plans were delayed by the sanctions regime.

Western countries suspended sanctions against Iran as the Geneva nuclear deal came into force in January 2014. Iran was permitted to import materials for its auto-manufacturing sector as a result of the nuclear deal implementation, which has led to a sharp increase in the country’s auto output.

Hazrati claimed that the company’s main target markets are North African countries and Persian Gulf littoral states.

The export manager declared that the company currently has no plans to launch joint manufacturing units in foreign countries to produce commercial vehicles and has mainly focused on exports.

“Investment in foreign countries for launching joint factories is not economically justified due to the limited demand for commercial vehicles,” he said.

Hazrati stressed that exports to neighboring countries are a priority for the company, adding that both sides would benefit from the reduced costs. The 2014 production statistics released by the International Organization of Motor Vehicle Manufacturers (OICA) show that Iran’s auto production increased by 46.7% in the 12-month period. The figures indicate that Iranian automakers produced 1,090,846 cars and commercial vehicles last year.

Iran’s car output reached 555,954 units in the first half of the current year, according to the OICA.

The figures, indicating a 13.9% increase year-on-year, make Iran the world’s 18th largest car manufacturer in the period.

However, recent statistics showed that purchases of Iranian cars have fallen considerably in recent months with a 12% decline for the first six months of the Iranian year, thus contradicting the growth forecast.

Iran manufactured 496,982 sedans and 58,972 commercial vehicles in the first half of 2015.