Economy, Auto

Benz to Sign Production Deal With IKCO

Benz to Sign Production Deal With IKCOBenz to Sign Production Deal With IKCO

Iran Khodro Industrial Group will sign an agreement with Mercedes-Benz in the first half of the new Iranian year (starting March 20).

Chief Executive Officer of IKCO Hashem Yekezare said the proposed deal will include production of passenger cars and commercial vehicles in Iran and follows a previous agreement.

IKCO and Germany’s Daimler Company, which owns brands such as Mercedes Benz, Mercedes-AMG and Smart, signed a memorandum of understanding in January on establishing two joint companies. However, since that point, not much has happened publicly between the two parties, IRNA reported.

Daimler, the top truck producer worldwide, and Iran Khodro, the biggest auto manufacturer in the Middle East, plan to establish two companies using each other’s capacities to set up a major commercial auto production hub in the region.

As the first such venture between the two, it would mark a major development in their previous collaboration.

Yekezare said that in the new round of its international cooperation, IKCO will devise a completely different approach to manufacturing inside the Islamic Republic, emphasizing joint investment and production in Iran, which Mercedes will bring to the table.

 Previous Deals and MoUs

Earlier in January, high-ranking officials from Iranian Diesel Engine Manufacturing Company and Daimler reached an agreement to produce three industrial engines in Iran.

Daimler officials signed a memorandum of understanding with Iran Khodro in the presence of the companies’ CEOs. The partners aim to produce three diesel engines in Tabriz.

Yekezare and Daimler Trucks head, Wolfgang Bernhard, signed the related documents, Mizan Online reported.

Also in January, as an initial smaller deal, a contract was signed IKDC and Iran’s Health Ministry, the company will supply 100 Benz Sprinter 314 ambulances to the ministry within three months, said Gholamreza Razzazi, the firm’s managing director at the time.

The managing director also said the company was in talks with France’s Peugeot.

 The Parisian carmaker said in January it had signed a binding contract worth €400 million with Iran Khodro to produce a range of cars in the country and also to refund Iran Khodro for the losses caused by its premature exit during the sanctions.

IKCO will also negotiate a business agreement with Datsun, an automobile brand owned by Japan’s Nissan.

In addition to Mercedes and Peugeot, Yekezare recently announced the company is set to negotiate a deal with Datsun and if all goes well, Datsun will be selected as IKCO’s new international business partner, Eghtesad News reported.

Fiat recently denied that it was in any talks with Iran Khodro, noting that even though it was interested in the Iranian car market as a whole, it had not taken a decision and press releases from trade organizations were wrong in claiming it is entering the market.