After a six-year absence from the Iranian market due to economic sanctions, Daimler Trucks is readying itself for a showdown in the reopened market with the now entrenched Chinese truck manufacturers.
Daimler Trucks boss Wolfgang Bernhard admitted to journalists at a briefing in Stuttgart, also attended by Bloomberg, that the German truck manufacturer is bracing for a fight with the Chinese manufacturers.
Bernhard says the Chinese manufacturers occupied the vacant “chairs” after Daimler Truck’s departure, and they won’t relinquish them easily.
Bloomberg says Daimler Trucks has moved fast to re-establish ties with Iran, signing preliminary agreements last month with Iran Khodro Co., the country’s biggest automotive manufacturer.
Iran Khodro Co, also known as IKCO, produces passenger cars, minibusses, as well as heavy truck and bus.
Daimler Trucks sees demand in the market eventually on par with Turkey at about 40,000 trucks a year.
Before dropping business in Iran in 2010 amid international sanctions against the country’s nuclear research program, Daimler Truck sales were around 10,000 units annually.
Daimler Trucks is looking to Iran and other countries to help offset struggles in more traditional markets reports Bloomberg.
North American truck demand is weakening amid a slowdown in manufacturing.
Bernhard told Bloomberg that Daimler Trucks may be forced into layoffs as Brazil’s recession hits sales of heavy vehicles.
China’s market meanwhile has slowed, putting pressure on companies like Dongfeng Motor Group Co. to expand overseas.
“The difficult market conditions we’ve seen last year have become more difficult,” says Bernhard, who also sees Chinese manufacturers making inroads in Africa, where Daimler Trucks is also pushing for growth.
Even amid these tough markets, Bernhard reaffirmed to Bloomberg that Daimler Trucks is sticking to keep it sales target and profit steady this year.
