Iran Khodro and German auto manufacturer Daimler will sign a deal soon for the production of cars and commercial vehicles, says Iran Khodro managing director Hashem Yekezareh.

The announcement follows reports that Peugeot, France’s largest car-maker, is seeking to revive its agreement with Iran Khodro for the production of Peugeot-branded automobiles.

Yekezareh said in Tehran on 28 July that Daimler had decided to “enter the Iranian market in full force” and that it will re-open its office in Iran in the next two to three months.

“According to the agreement reached with Mercedes-Benz, a five-year deal will be signed soon under which Setareh Iran as the importer and Top Khodro Company as the manufacturer will start distribution of [Mercedes-]Benz cars in Iran,” said Yekezareh.

He said there would also be a 10-year agreement for the local production of commercial vehicles and that Mercedes-Benz was interested in buying a 30 per cent stake in Iranian Diesel Manufacturing with the objective of producing car engines.

Yekezareh said that Vehicle Axle Manufacturing Company (Vamco) will expand cooperation with the German car maker and that Iran Khodro has had negotiations with Volkswagen about vehicle manufacturing in Iran.

“Ultimately, which company will be Volkswagen’s partner in Iran, let the company announce itself,” Yekezare said. “But we think Volkswagen is one of the suitable choices for partnership with Iran Khodro,” he added.

Both Daimler and Volkswagen have declined to comment on Yekezareh’s statement.

“We appreciate that the P5+1 (USA, Russia, China, France, Great Britain and Germany) and Iran came to a final accord,” Daimler spokesperson Silke Mockert told MEED in statement on 30 July. “We will re-enter the market considering the persistent sanctions regime and further export control regulations after the implementation of the nuclear agreement. Against this background, we currently conduct individual transactions.”

Germany’s Vice-Chancellor Sigmar Gabriel visited Iran with a trade delegation on 19-21 July.

German exports to Iran fell from $5.1bn in 2010 to $2.3bn in 2013. They recovered to $5.8bn in 2014.