VW picks local partner in bid to cement foothold in Iran

EghtesadOnline: Germany’s Volkswagen says it has picked a local Iranian auto company to represent it in one of the biggest markets of the Middle East.

News ID: ۷۴۱۱۹۶

26 April 2017

Volkswagen in a statement named the Iranian company as Khodro Sazi Sina (KSS) which it said had been chosen after “thorough and intense studies”.  The company emphasized that the KSS’ closest rival – Mammut Group – was only a few points behind.

It added that the KSS had gone through a comprehensive restructuring and that this was significantly instrumental in its success to become Volkswagen’s representative in Iran, according to PressTV.

“We realized from the beginning that the KSS had been able to change its position inside the Iranian auto market as a result of the same restructuring campaign.

Volkswagen said it was satisfied over a plan by the Iranian company to provide as much as around €20 million for getting its business in the country off the ground.

It also stressed that it expected the KSS commitments toward representing Volkswagen should be maintained and the required investments should be to the same degree made.

“There is the opportunity to acquire a market access for Volkswagen to one of the largest markets in the Middle East. The cooperation will not only provide several hundred jobs in Iran but will also be a basis for export from Iran such as ambulances or special vehicles,” said the major German auto player in its statement sent to Press TV.

The first vehicles would be supplied to the Iranian market through the KSS later this year, Volkswagen emphasized in its statement.

Last April, Iran’s Ambassador to Germany Ali Majedi had said that a deal with an Iranian company to cooperate with Iran’s auto industry was close.

Majedi said the company’s management have been specifically studying the capabilities of several local carmakers and are now trying to choose between only two companies.

Volkswagen announced last September that it is grooming its Skoda brand for the Iranian market.

"Iran is a very interesting market with great opportunities," Volkswagen brand R&D chief Heinz-Jakob Neusser said at the time.

Reuters further quoted a company source as saying that the German company was considering a move into Iran with the mass-market Skoda and Seat brands.

Volkswagen’s last venture in Iran involved its production of the Gol compact with Iran’s Kerman Khodro before withdrawing under US pressures in 2011.