Iran Khodro and Daimler Establish Joint Venture

Iran Khodro has issued statements with Daimler AG, the owner of several subsidiary companies and major automotive brands such as Mercedes-Benz, Mercedes-AMG, and Smart, indicating the signing of a memorandum of understanding for extensive cooperation in the automotive sector. The Iran Khodro industrial group reported on Monday, January 28, that Daimler, as the largest truck manufacturer in the world, and Iran Khodro, the largest automaker in the Middle East, have signed a memorandum of understanding for 'joint investment for regional production of Mercedes-Benz trucks and powertrain components,' 'establishing a joint company for the sale of Mercedes-Benz trucks and their components in Iran,' and also purchasing a portion of the shares of the 'Mahvar Khodro' company alongside 'Idem' (Iran Diesel Engine Manufacturing). The report adds that Iran Khodro and Daimler aim to leverage each other's relative advantages by establishing two joint companies, thereby strengthening their positions and creating a hub for commercial vehicle production in the region. Daimler also states that its truck division has signed a contract with Iran Khodro, which is part of the company's plan to re-enter the Iranian market. According to Daimler's official website, the company sold up to 500,000 trucks in 2015 and aims to increase its truck sales to 700,000 units by 2020. Daimler mentions that it has also signed contracts with Iran Khodro Diesel and the 'Mammut' group (a trailer manufacturer in Iran) to establish a joint company and set up production units for Mercedes-Benz trucks and their powertrain components. Daimler plans to establish its representative office in Iran by next spring. With the lifting of sanctions on Iran, it is expected that other international companies will also enter the Iranian automotive market. Iranian President Hassan Rouhani is scheduled to visit France and Italy on January 25, where automotive companies from both countries have a history of activity in the Iranian car market. Last spring, French company Peugeot and Iran Khodro held negotiations, with Hashim Yekezar, CEO of Iran Khodro, stating that the new cooperation agreement between the two companies has been finalized and is incomparable to any previous contracts signed in the country's automotive industry. He mentioned that the two companies plan to establish a joint company, which will be required to sell 30% of its production within Iran. Renault, another French automotive giant, has also begun negotiations with Iran to purchase shares of Pars Khodro. Fiat from Italy is also considered a major global automaker, and previously, Mohammad Reza Nematzadeh, Minister of Industry, Mine and Trade, had mentioned the possibility of cooperation between Iran and 'an Italian company' in the automotive sector. Nematzadeh announced on January 10 that Iran's vehicle production is expected to reach three million units per year within the next decade, and negotiations with Asian companies are also underway in this regard. Meanwhile, the status of American automakers' activities in Iran remains unclear. Some Iranian automotive officials have reported the 'interest' of American companies in entering the Iranian market, but Reuters reported on Monday, citing General Motors, that 'existing U.S. sanctions currently impose significant restrictions on the company's activities abroad, and its position on engagement with Iran has not changed.' Barack Obama, the former U.S. President, recently lifted sanctions related to non-American automakers' cooperation with Iran alongside the nuclear sanctions. In this context, where do Germany or Italy, Iran Khodro's new partners, come from? Why do Iran Khodro and Peugeot threaten each other? The decline in production, the drop in car prices, the production of various vehicles halved in September of this year, Iranian export cars; cheaper than domestic, unsold abroad, changing the playing field of 'proxies'; war against the people in the streets of Iran, the first paragraph; the responsibility of the opposition and the possibility of radicalization of Iranian society, the death of the last Mossad representative in Tehran amid the Iran crisis.