Daimler AG, seeking to regain its position as one of the leading truck makers in Iran after a six-year absence, is bracing for a fight in the reopened market with now-entrenched Chinese rivals.
“The chairs we used to sit on in Iran weren’t left empty when we were gone,” Wolfgang Bernhard, head of Daimler’s trucks division, said Feb. 22 at a briefing with reporters in Stuttgart, Germany. “Chinese competitors now sit in these chairs.”
The German automaker has moved fast to re-establish ties with Iran, signing preliminary agreements last month with Iran Khodro Co., the country’s biggest auto producer. Daimler, the world’s largest truck maker, 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 had sold as many as 10,000 vehicles there a year.
Daimler is looking to Iran and other countries to help offset struggles in its more established markets. North American truck demand is weakening amid a slowdown in manufacturing, while Bernhard said Daimler may be forced into layoffs as Brazil’s recession hits sales of heavy vehicles. China’s once-booming market, meanwhile, has slowed, putting pressure on companies such as Dongfeng Motor Group Co. to expand overseas.
“The difficult market conditions we’ve seen last year have become more difficult,” said Bernhard, who also sees Chinese manufacturers making inroads in Africa, where Daimler also is pushing for growth. Even amid these tough markets, the executive reaffirmed that the unit is sticking to its target to keep sales and profit steady this year.