German companies return to Iran after sanctions lifted
German companies started their plans to return to Iran for business after economic sanctions against the Middle Eastern country were lifted over the weekend.
Daimler Trucks announced on Monday it had signed letters of intent with local partners Iran Khodro Diesel (IKD) and Mammut Group, starting a process for “a comprehensive re-entry into the Iranian market.”
Daimler and its partners were also looking at establishing a joint venture in Iran to sell Mercedes-Benz commercial vehicles.
In the first quarter of 2016, the company intends to open a representative office in Tehran.
“Daimler commercial vehicles have always had an excellent reputation in Iran. And right now, there is a huge demand for commercial vehicles, especially trucks. We will quickly resume our business activities in the market,” said Wolfgang Bernhard, head of Daimler Trucks.
The announcement followed decisions by the United States and the European Union to lift economic sanctions against Iran on Saturday after the country started to implement an international deal reached in July 2015 to restrict its nuclear program.
The Association of German Chambers of Commerce and Industry (DIHK) said on Monday that the need for modernization in Iran offers great opportunities for the German economy. German exports to Iran were expected to grow to 5.0 billion euros (about 5.45 billion U.S. dollars) in the medium term and 10 billion euros in the long term.
In 2014, German exports to Iran amounted to 2.4 billion euros, while in 2005, a year before sanctions were imposed on Iran due to its nuclear program, German exports to the country stood at 4.4 billion euros.
“German companies lost important market share in Iran in recent years,” said DIHK’s foreign trade director Volker Treier, “We now must revive German-Iranian economic relations quickly.”
According to DIHK, German companies in sectors such as automobile, mechanical engineering, environment technology, agriculture and health care will benefit the most from the Iranian market.