Azernews.Az

Friday March 29 2024

Iran, Germany to focus on manufacturing new types of motors

18 November 2015 13:50 (UTC+04:00)
Iran, Germany to focus on manufacturing new types of motors

By Aynur Karimova

The new round of cooperation between the car manufactures of Iran and Germany -- Iran Khodro Diesel and Daimler AG -- will focus on manufacturing new versions of motors in Iran.

This was noted by Mohammad Hazrati, export manager of the Iran Khodro Diesel.

He told Trend that Daimler is Iran’s traditional partner, and Iran Khodro Diesel has started negotiations with the German company and widespread cooperation is expected after sanctions are removed.

Earlier, Hashem Yekeh Zareh, the CEO of Iran Khodro Industrial Group (IKCO), claimed that the German company would purchase 30 percent of Iranian Diesel Engine Manufacturing's (IDEM) shares to produce cars in Tabriz, adding that Mercedes-Benz would sign a 10-year agreement to produce trucks and autobuses in Iran.

IDEM and Daimler AG have been partners since 1969. However, this relationship was interrupted when the German company left Iran during the period of sanctions.

"The IKCO continues to manufacture previous versions of motors and will continue to support these products, and joint manufacturing of new versions of motors for commercial cars will become a priority during the post-sanctions period," he noted.

Iran’s traditional customers, including Saudi Arabia and African countries, are currently interested in buying trucks with the older-style motors. The manufacture of new versions of these motors was planned some 4-5 years ago, but these plans were delayed by sanctions.

Responding to a question on how the suspension of sanctions following the Geneva nuclear deal had affected Iran’s auto industry, Hazrati pointed out that no permanent or major steps have been made during the sanctions period.

“During that period, the Iranian companies resolved their give and take issues with their foreign partners,” he stressed.

Western countries suspended certain 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.

IKCO’s main target markets are Northern African countries and Arab states of the Persian Gulf. Meanwhile, 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 noted.

Iran is one of the biggest producers of cars in the region. The automobile industry accounts for nearly 10 percent of Iran’s gross domestic product.

Experts consider the automobile industry as one of the most promising economic sectors to bring big profits to Iran after the lifting of sanctions.

Following a nuclear deal between P5+1 and Iran, the race has tightened for access to Iran’s auto market. European automakers, which were forced to leave the Iranian market after international sanctions on the Islamic Republic for its nuclear program, are now attempting to restore their previous shares of Iran’s vast car market.

German automakers Volkswagen and Daimler are reportedly in on track to return to the emerging market, which has a pent-up demand for quality cars after years of sanctions.

However, sanctions on Iran hit the automotive industry hard, slicing production by 1 million units from its peak of 1.6 million in 2011 and leading to 100,000 job redundancies.

Meanwhile, the 2014 production statistics released by the International Organization of Motor Vehicle Manufacturers (OICA) show that Iran’s auto production increased by 46.7 percent 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 percent increase year on year make Iran the world’s 18th largest car manufacturer in the period.

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

--

Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz

Loading...
Latest See more