Araz News:German company Mercedes-Benz will purchase 30 percent of Iranian Diesel Engine Manufacturing’s (IDEM) shares to produce autos in the city of Tabriz.

On July 28,The CEO of Iran Khodro Industrial Group (IKCO) Hashem Yekeh Zareh said  that Iran and Mercedes-Benz would sign a 10-year agreement to produce truck and autobus in the city of Tabriz,trend reported.

He also mentioned the trip of a German delegation headed by Germany’s Minister for Economic Affairs and Energy Sigmar Gabriel last week, saying that a French delegation (headed by Foreign Minister Laurent Fabius) will arrive in Tehran on July 29. “These events indicate the importance of Iran’s auto market to foreigners.

He said that German Mercedes-Benz was Iran’s major partner before sanctions, but left the country, however, this company wants to re-open its office in Tehran during next two to three months.

He also said that Mercedes-Benz wants to purchase 50 percent of Setar-Iran company’s (Iran Start) shares and sign a 5-year agreement to produce sedans.

“German Volkswagen also can become a reliable partner for us” he said.

Iran Khodro may sign a deal with German Daimler AG to produce commercial vehicles and luxury cars as soon as three to four months from now, Yekeh Zareh said.

He also said that French Peugeot wants to establish a 50-50 joint venture with Iran to produce car. “30 percent of the produced cars will be exported,” he added, saying French Peugeot and Renault as well as Japanese Suzuki have already agreed to return to Iran.

He also said that the price of produced cars would be 30 percent less that the similar brands abroad.

The CEO of IKCO said that before sanctions (2012) Peugeot was sharing 22 percent of Iran’s car market, but withdrawal from Iran caused huge losses for this company.

The 2014 production statistics by the International Organization of Motor Vehicle Manufacturers (OICA) show Iran’s auto production increased by 46.7 percent in the 12-month period. The figures indicate the Iranian automakers produced 1,090,846 cars and commercial vehicles last year.

Iran’s Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said on July 23 that Iran was looking to move away from state ownership in many sectors, creating joint ventures for auto parts manufacturers with the aim to produce 3 million vehicles by 2025, of which a third would be exported.