Embattled Volkswagen pushes forward into Iranian market

Published October 5th, 2015 - 10:13 GMT

Volkswagen officials are visiting Iran to discuss possible joint cooperation with local companies which have the Middle East’s biggest car market under their belt. 

The German car manufacturer has sent its officials to Iran with Olaf Lies, minister of economic affairs, labor and transport for the federal state of Lower Saxony, where VW is headquartered.

Their visit indicates the carmaker’s determination to press on with its new plans in Iran despite fallout from revelations that VW had fitted 11 million diesel vehicles around the world with devices designed to mask the level of emissions.  

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

VW officials accompanied German Economy Minister Sigmar Gabriel in a July visit to Iran along with representatives of Daimler, Siemens, Linde, BASF and GIZ.

Last month, a VW official said the group was grooming its Skoda brand for the Iranian market of 80 million people who bought 1.1 million cars last year.

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

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

On Saturday, Lies met with officials of Tehran Chamber of Commerce, saying German companies were interested in resuming cooperation with Iran with the removal of US and European sanctions.

“Iran is seen as one of the most important economies of the region which was among our biggest partners before the sanctions,” the Tasnim news agency quoted him as saying.

“Iran played an important role in forging ties between Germany and the regional countries. We are happy the way has reopened for joint cooperation again,” he said.

Lies said there exist fairly large capacities for cooperation with Iran in his state, including in the transportation, health, agriculture, food industries, machinery and renewable energy sectors.   

He said besides VW officials, executive of German tourism companies are accompanying him in the visit to Iran.

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