Mercedes-Benz Prepares to Increase Activities in Iran

Perhaps when Dieter Zetsche, the CEO of Daimler, ordered Mercedes-Benz to exit Iran, no one thought that one day he would announce an increase in Benz's activities in Iran for the production of passenger cars, trucks, and buses. After unveiling Mercedes-Benz vehicles on the first day of the Paris Motor Show, Zetsche spoke to Radio Farda about Benz's plans for Iran: "Initially, we discussed commercial products in the contract, and undoubtedly, the details will be provided to you. We cannot talk about it in detail right now. We will discuss it later." He added, "Numerous discussions and serious negotiations have taken place, and we have initiated serious negotiations for all our activities, such as buses and trucks, with qualified Iranian parties, some of whom are our former allies in Iran. We have made decisions regarding some of them, and we are currently focusing on market objectives and strategies in various fields. Therefore, we are ready to increase our opportunities in the Iranian market." Regarding passenger cars and their production in Iran, Zetsche stated, "We are in the final stage and are determining the technical specifications of the desired vehicles and products. This means we are looking for special products that are available." Mercedes-Benz had previously invested in passenger and heavy vehicles in Iran during Mohammad Khatami's presidency. For example, the company had increased its investment in IDAM for the production of Benz engines and directed ZF Germany to invest and collaborate with Charkheshgar Company in Iran for the production of Benz gearboxes. At that time, Mercedes-Benz held 30% of the shares of IDAM in Tabriz, and some engines manufactured in Iran were exported to the global Mercedes-Benz network. The company also made a direct investment by fully acquiring the shares of Setareh Iran Company for the production of Mercedes-Benz Class E and C. Iran was supposed to become the production center for Mercedes-Benz vehicles in the Middle East. Production of Class E models had begun, but with the rise of Ahmadinejad's government and the deterioration of relations between Iran and Germany, production significantly decreased, and shortly before the imposition of sanctions, the company left Iran. However, after the nuclear agreement and before the finalization of new contracts with Renault and Peugeot, the German holding Daimler, which owns Mercedes-Benz, signed the first memorandum for the renewed production of its products in Iran with Iran Khodro Diesel. In this memorandum, Mercedes-Benz is set to invest directly in Iran and establish a joint company with Iran Khodro Diesel. Besides the issue of Iran, the hot discussions at the Benz booth at the Paris Motor Show revolved around future vehicles, from smarter cars to electric vehicles. Mercedes-Benz announced that by 2025, it intends to launch ten electric models under the EQ brand. Peter Zetsche, the head of Daimler Group, stated at the Paris Motor Show that these ten models would account for 15 to 25 percent of total Mercedes-Benz product sales, making the factory the largest producer of clean vehicles in the world. He said, "Given the increasing knowledge of new battery manufacturing, Mercedes-Benz is more optimistic about expanding electric vehicles." Daimler will now market its electric vehicles under the EQ brand. The first letter of this brand signifies electric, and the second letter signifies the intelligence of these vehicles. The smart vehicles produced under the EQ brand will be able to share information among similar vehicles. The first electric vehicle under the EQ brand will enter the market in 2019 and will likely resemble the EQ concept vehicle that Mercedes-Benz introduced at the Paris Motor Show. This vehicle is equipped with a 350-horsepower engine, with a 0 to 100 km/h acceleration of about five seconds. It can travel 500 kilometers on a single charge with batteries placed under the vehicle, which is roughly the range of a car with a full tank of gasoline. If Mercedes-Benz fulfills this promise, it will revolutionize the electric vehicle sector in 2019. Daimler plans to spend billions of euros on battery technology development and factory expansion.