VW to tap into Iran car market

VOLKSWAGEN will start exporting cars to Iran next month, returning to the resurgent Iranian market after more than 17 years, in a move that may help the German carmaker reduce its reliance on volatile markets such as China and Brazil.

Volkswagen had signed an agreement with Iran’s Mammut Khodro, which would import VW brand models Tiguan and Passat via eight dealerships, focusing on the greater Tehran area, it said yesterday.

Europe’s largest automotive group is seeking to tap new overseas markets as it grapples with billions of euros in costs from an emissions scandal while pushing a strategic shift to electric cars and new mobility services.

Group deliveries to China, VW’s biggest market accounting for over a third of its sales, fell 3.3% between January and May to 1.51 million cars.

Sales in Brazil were down 1.9% to 116 600 cars.

VW is trying to catch up with French rivals PSA Peugeot Citroen and Renault, which have been pushing hard into Iran since the country’s 2015 deal with world powers that saw international sanctions lifted in return for curbs on Tehran’s nuclear activities.

“We are strengthening our international presence once more ,” VW’s project leader for Iran, Anders Sundt, Jensen said.

Wolfsburg-based VW, which sold its iconic Beetle in Iran in the 1950s and its Gol subcompact model in the 1990s, left the market in 2000.

Annual sales in the Iranian market could rise to about three million cars over the medium to long term, VW said, citing government estimates. – Reuters