Scandinavian supplier association, FKG, says its visit to Iran this week has “exceeded” expectations as Tehran anxiously waits to see if current draconian international economic sanctions are lifted or not in June.
Iran has been in the economic cold for decades as Western countries have imposed an iron trade grip in a bid to dissuade Tehran from what they see as its attempts to enrich uranium for possible nuclear weapons, but recent talks in Switzerland are offering genuine hope a thaw is possible.
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A plethora of countries and automotive bodies are now beating a collective path to Iran’s door however, in anticipation of business relations being normalised and in an attempt to smooth the way for future commercial contracts to be inked.
FKG has been in the Iran this week visiting the cities of Tehran and Tabriz as part of its Go Global supplier initiatives, which have already included Brazil, China and Russia, with the formally ostracised country viewed as ripe for development.
“Expectations [were] exceeded, no doubt,” FKG managing director, Fredrik Sidahl told just-auto from Gothenburg. “Passenger cars are old, not fragile, not scary old, [but] trucks are very old, 40-50 years.
“They are introducing programmes now to exchange trucks for new [ones] – one reason is pollution of the country. Emissions are a topic for Iran as well as fuel consumption even though they have their own oil.
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By GlobalData“They still manufacture trucks, buses, cars and tractors and the way they do that is import from a third country. They really want to come back to having direct purchase and cooperation with Europe and of course they welcome Sweden as an automotive country, that was very, very clear.”
The supplier association chief remains adamant however, even if sanctions are not lifted following exhaustive negotiations between Iran and the so-called P5 +1 (Security Council powers together with Germany and the European Union), the automotive market would still survive.
“They are definitely not desperate, they will survive even [if] sanctions are not lifted,” said Sidahl. “But they are very anxious that will happen, that is for sure.”
FKG’s visit follows a similar delegation from French supplier body, FIEV (Federation des Industries des Equipments pour Vehicles), while it even appears a US party was in the country recently – “quite interesting” as Sidahl noted, adding: “Various delegations from everywhere start to understand Iran as a future country for export.”
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.
IKCO said there were talks between “some other new players” in Europe, with Iran “very, very eager to see new products,” while fellow producer, Saipa estimated the market had the potential to reach 3m vehicles from its present 1.4m.
The P5+1 group maintained a “decisive step” had been taken and solutions on key parameters to the Joint Comprehensive Plan of Action (JCPOA) had been reached in Switzerland.
