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Daimler's Truck Business to Return to Iran as Sanctions Lift

19 January 2016 - The New York Times

Daimler's Truck Business to Return to Iran as Sanctions Lift

Daimler AG says its truck business is returning to Iran as Berlin and Tehran look at restoring economic ties after a landmark deal to curb Iran's nuclear activities led to the lifting of sanctions.

Stuttgart-based Daimler announced Monday that it had signed letters of intent with local partners Iran Khodro Diesel and Mammut Group to arrange a "comprehensive re-entry" into the country where Daimler started doing business in the 1950s.

Daimler Trucks head Wolfgang Bernhard said that "there is a huge demand for commercial vehicles in Iran" and that "we plan to quickly resume our business activities in the market there."

Plans include a joint venture for local production of trucks under Daimler's Mercedes-Benz brand, cooperation on engine production, and establishment of a sales arm. Plans also include setting up a representative office, and sales of Daimler's Mitsubishi FUSO brand trucks in cooperation with Mayan, part of the Dubai-based Mammut Group.

Daimler's business in Iran started in 1953 and it sold up to 10,000 vehicles a year there, but was interrupted from 2010 to 2016 by the sanctions. The company estimates that Iran needs to replace 56,000 commercial vehicles over the next three to five years.

Germany's Economy Minister Sigmar Gabriel said Sunday that the nuclear deal offers a chance "to open a new chapter" in German-Iranian business relations and plans to chair a joint economic commission in Tehran in May. He has cautioned that restoring ties is "a long-term process."

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