FKG visited Tehran as part of its Go Global supplier initiative

FKG visited Tehran as part of its Go Global supplier initiative

Scandinavian supplier association, FKG, says Iran could be a 2.5m or 3m market if current draconian sanctions against the country are lifted this summer.

Iran has benefited from a partial easing of trade restrictions by Western countries anxious it is looking to enrich uranium for nuclear weapons, but recent talks in Switzerland have paved the way for a potential lifiting of all sanctions as early as the end of June.

FKG led a delegation of suppliers to Iran last week in a bid to lay the groundwork for a possible normalisation of business relations, with the component body echoing comments made by automaker, Saipa to just-auto suggesting the market could more than double in size.

"Sanctions I guess have to lift, not in all areas, but they have to lift," FKG managing director, Fredrik Sidahl told just-auto from Gothenburg. "It is definitely [a 2m, 3m market].

"Due to sanctions, they are down to 900,000 and they have a potential for 2.5m vehicles. There is a great support programme...to exchange thousands and thousands of trucks because they are old.

"It is definitely an automotive producing country. We are waiting for what will happen in the negotiations at the end of June. I would like to take it step by step. We have been there and we have got a very positive experience and [were] very well received - they are welcoming us with open arms."

During the visit - organised through the auspices of FKG's Go Global initiative which took in the cities of Tehran and Tabriz - the supplier association also visited its equivalent in Iran - Sapco.

"We met the Sapco board and they said we will assit you in any way we can," added Sidahl. "We have already received mail and telephone calls. One company was following us [and is] having extra talks with one of the potential customers.

"They said we need gearbox shifters, instrumentation clusters [for example, and] they can help us with that.

"Cars were old, but not particularly old, 10-15 years old. It is old tooling, old platforms."

The FKG chief noted there was "a sort of political dinner every night," where assistance was promised at Mayoral level, while in perhaps a nod to the body's Swedish roots, the delegation was ferried around in five Volvo X60s.

FKG's visit follows a similar trip by French supplier body, FIEV (Federation des Industries des Equipments pour Vehicles), while it even appears a US party was in the country recently

PSA Peugeot Citroen recently confirmed to just-auto it was ready to start working with Iran Khodro (IKCO) to produce vehicles domestically as opposed to its previous CKD shipments, while the Iranian manufacturer is now eyeing further Western cooperation.