Daimler Trucks says it will return to Iran having signed letters of intent with local partners Iran Khodro Diesel (IKD) and the Mammut Group.

The deal was announced hours after Iran rejoined the international business community, following the lifting of decades of sanctions imposed by the West in protest at what it believed to be Tehran’s uranium enrichment programme for possible use in nuclear weapons.

Daimler added it had successful business relations with IKD for the past 50 years. IKD is a subsidiary of Iran Khodro Industrial Group, the largest vehicle manufacturer in the MENA region having more than 50% market share in Iran.

Areas of cooperation include a joint venture for local production of Mercedes-Benz trucks and powertrain components, plus the establishment of a sales company.

There are also plans for Daimler to return as a shareholder in the former engine joint venture, Iranian Diesel Engine Manufacturing (IDEM). In addition to this, both partners are looking at establishing a joint venture for local sales of Mercedes-Benz commercial vehicles.

“Daimler commercial vehicles have always had an excellent reputation in Iran,” said board member, Wolfgang Bernhard. “And right now, there is a huge demand for commercial vehicles, especially trucks.

“We plan to quickly resume our business activities in the market there. The signing of the letters of intent with our local partners IKD and Mammut Group are important pre-requisites to resume business quickly.”

Daimler says Iran has significant growth potential following many years of sanctions and the pent-up demand in the transport sector.

Iran’s Ministry of Industry, Mine and Trade estimates around 200,000 commercial vehicles will be replaced in the coming years – some 56,000 of them in the next three to five years alone.