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Volvo shifts into reverse on Iran sanctions


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Press TV / May 13, 2015

Sweden’s Volvo Trucks Corporation has resumed its production of heavy trucks in Iran, putting an end to four years of absence from the country’s massive market under sanctions.

The company marked its return by opening a production line for a new generation of Volvo FH trucks at Saipa Diesel west of Tehran, Press TV reported.

It includes production of FH Globetrotter high cab vehicles, with a 500 horsepower engine compliant with Euro 4 emissions standards.

The engine is also provisioned with the option to upgrade to Euro 6, CEO of Saipa Za’far Tanhapour said at the inauguration ceremony.

Volvo’s absence marked the introduction of Chinese vehicles which have become the subject of criticism for poor quality.

Tanhapour said intensified sanctions forced his company to sever ties with Volvo and find a replacement in Chinese products, which involved sales of 5,300 commercial vehicles.

“Chinese vehicles possess about 80% of European products in quality but their prices are lower,” he said.

As many as 137,000 commercial vehicles are currently plying Iran’s roads, of which 67,000 need to be replaced with new ones, Tanhapour said.

The official said Saipa Diesel is in talks with several reputable companies, including Mercedes-Benz and Renault Trucks.

“The signing of a joint venture agreement with Benz for production of light, heavy and trailer trucks as well as buses and minibuses is in the works. Moreover, this reputable company has taken some steps for production of electric buses (in Iran),” Tanhapour said.

Meanwhile, CEO of Saipa Group Sa’eed Madani said Iran has the capacity to turn into a hub for production of commercial vehicles in the region.

“Iran’s cooperation with foreign automakers includes a 400 million-strong market. If we make planning for tapping it, its proceeds could benefit Iran’s population of 70 million people,” he said.

The official touched on his company’s negotiations with France’s Renault, saying they were trying to forge a “win-win cooperation” mechanism.

French automakers, including Peugeot Citroen, slammed the door on Iran’s face after Europe intensified sanctions on the Islamic Republic in 2012.

Many Iranians are advising caution in dealing with the French and call for stronger checks and balances in new trade with them.

Madani touched on the deep-rooted malady which Iran’s auto-making industry is suffering from.

“We have to admit that certain groups in the country are merely after car imports. We have to put an end to this phenomenon by producing quality cars at suitable prices.”

Iran’s auto industry is the Middle East’s largest but it is based on assembling foreign brands.

The industry has the full state support behind it and a monopoly on the market which, many critics say, has resulted in a laggard sector with no serious efforts to improve quality despite frequent price hikes.

The government also levies hefty customs duties on imports in order to protect the domestic auto industry.

Related reading - http://www.bigmacktrucks.com/index.php?/topic/29989-volvo-finds-exit-ramp-from-iran-market/?hl=iran

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Iran to turn into regional Volvo production hub

Bloomberg / May 13, 2015

An Iranian automotive industry official has said that the country is going to turn into a regional hub for the production of Volvo vehicles.

"We will turn Iran into a regional hub for the production of Volvo, and having in mind the abilities of domestic producers, we will enhance the percentage of the production of this brand inside the country," Said Madani, CEO of Saipa Car Manufacturing Group said.

"Considering our situations, our plans must for sure address the regional market with a population of 400 million people, instead of the domestic market with a population of 70 million," he said in a ceremony to unveil the Iranian-produced Volvo FH500 truck, IRIB news agency reported May 12.

According to statistics by OICA (Organisation Internationale des Constructeurs d'Automobiles), Iran's commercial vehicle manufacturing rose by 46 percent in 2014 to reach 164,871.

Related reading - http://www.irtransit.ir/category/%DA%AF%D8%A7%D9%84%D8%B1%DB%8C-%D8%B9%DA%A9%D8%B3-%DA%A9%D8%A7%D9%85%DB%8C%D9%88%D9%86-%DA%A9%D8%B4%D9%86%D8%AF%D9%87/%D9%88%D9%84%D9%88%D9%88/volvo-fh500-new-series-iran/

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Tehran has now declined to commit to nuclear transparency measures that were part of a preliminary deal, and UN sanctions currently remain in place. (http://news.yahoo.com/u-says-iran-must-implement-nuclear-transparency-provisions-105105648.html)

And yet, Mack brand owner Volvo Group has from last month begun building trucks again in Iran, all capable of pulling missile launchers and tanks for the Revolutionary Guard.

It seems to me that if a foreign company wants to do business in America, and owns an American icon, it would act ethically, and with respect to United States foreign policy.

To say the least, Volvo Group has a very laissez-faire attitude about where they get their revenue.

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