Blog: Dave LeggettIran - better times ahead?

Dave Leggett | 20 October 2005

I visited Iran a couple of years back as part of an SMMT-DTI trade mission. It was a fascinating place to visit and very far removed from what I had expected beforehand, and I mean that in a good way. Interesting culture, friendly people, ambitious, hard working, civilised and a general attitude that seemed to say, ‘sure, it’s a theocracy here, but let’s not get too hung up on that.’ The talk then was of liberalisation of the economy and indeed Iranian society as a whole. The automotive business opportunity for the future also looked pretty sizeable – with the French and Germans making notable inroads that have since borne fruit.

FRANCE: Peugeot 206 to be exported from Iran
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IRAN: Renault signs deal with Iran's Pars Khodro for Megane production
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IRAN: Iran Khodro Diesel to assemble Mercedes cars
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FRANCE: Valeo signs agreement for new joint venture in Iran
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FRANCE: Renault (finally) signs deal to make Logan in Iran
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But there was a darker side to Iran’s relationship with Britain that was being strained by the Iraq war, even two years ago. A visit to the fortified British embassy in Tehran revealed the pressures that the staff there were constantly living under. There were pockmarks on walls caused by grenades hurled over the embassy walls by ‘demonstrators’ and security incidents were a regular occurence. A badly advised suicide bomber had recently driven into the embassy gates in a pick-up loaded with a couple of barrels of diesel oil, incinerating himself spectacularly but causing little other damage (the Tehran police cleared the mess in double quick time and apparently claimed it was a traffic accident; the photographic evidence was certainly a little bit gory). A few months earlier when the Iraq war kicked off, the embassy staff had had to temporarily evacuate when things really got dangerous.

Yep, maybe the diplomatic staff stationed there deserved that swimming pool and well appointed bar after all.

Anyway, the hoped for ascendancy of the liberals in Iran hasn’t happened yet and shows little sign of doing so at present – religious conservatives are firmly in control.

For the UK auto industry it would appear that Iran is not exactly fertile ground right now as economic ties are upset by wider political problems. But that’s the thing with emerging markets like Iran. They could pay off big time one day, but they are very risky. There are much safer bets.

And if the Iranian government wants to play politics with those few UK firms who have actually taken the plunge to do business with Iranian partners, that is pretty short sighted. Future trade and investment will be jeopardised. Britain could also be a good bridge to influence the US if Iran really is serious, one day, about engaging with the West, ending its relative economic isolation and joining organisations like the WTO.  But all the wrong messages are coming out of Tehran at the moment.

And to think, we gave ‘em the Hillman Hunter.

Read the feature on Iran’s automotive industry

Iran’s automotive industry - a developing opportunity
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UK: Apparent Iranian trade ban unlikely to much affect motor industry


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