Die Deutsche Bundesbank beziffert die Forderungen von Unternehmen in Deutschland gegen­über Iran auf 1.329 Mio. Euro (Stand August 2016).  Die Forderungen aus Finanzbezie­hungen belaufen sich dabei auf 653 Mio. Euro und die aus Handelskrediten auf 676 Mio. Euro.  Den For­de­­rungen  Deutschlands stehen Verbindlichkeiten ge­gen­über Iran in Höhe von 1.794 Mio Euro gegen­über.  Bei den deutschen Verbindlichkeiten gegenüber Iran entfallen 441 Mio. Euro auf Ver­bindlichkeiten aus Finanzbe­zie­h­ungen und 1.353 Mio. Euro auf Verbindlichkeiten aus Han­dels­­krediten. 

Die Forderungen der Banken in Deutschland gegenüber Iran lagen im August 2016 bei 428 Mio. Euro; die Verbindlichkeiten der Banken gegenüber Iran erreichten einen Wert von 3.083 Mio. Euro.    

After eying Iran for more than two years, Volkswagen is on the verge of signing a deal with an Iranian auto manufacturer

Mam­mut Khodro has pushed aside its rivals and is set to be­come VW’s official represen­ta­ti­ve in Iran.

Volkswagen is on the verge of signing a deal with a new Iranian auto manufacturer, according to reports from Tehran.  In the past few months, the German automaker has been in discussion with Iranian companies: Kerman Motor and Mammut Group—the latter being a family-owned operation.  Many industry watchers assumed that since VW had cooperated with Kerman Mo­tor in the past, it would be preferred over Mammut Khodro, an affiliate of Mammut group.  How­ever, on October 5, the local automotive website, Machin3, reported that Mammut Khodro is to become VW’s official representative in Iran.

Prior to the imposition of sanctions, Kerman Motor produced VW’s hatchback model, the Bra­zi­li­an-designed Gol, but production was halted in 2003.  After the imposition of western sancti­ons on Iran, Mammut and Volkswagen bypassed the blockade and imported a large number of the New Beetle, Golf and Passat models.  According to an informed source, although the new deal has not been announced yet, Mammut Khodro has already imported a large number of pre-assembled VWs that are to be introduced in the market soon.  Financial Tribune reached out to Mammut Khodro, the group in charge of the VW operation, it confirmed that the deal is going ahead.  “We are going to produce new VWs in Iran and also importing them,” it con­firm­ed.  Further investigations confirm that Mammut Khodro will also be the designated name of the new joint venture products, however their .com website is still under construction.  The soon-to-be JV follows the recent visit of German Economy Minister Sigmar Gabriel who was ac­companied by VW officials.

  VW Plans

Volkswagen is giving the impression that it is following the example of its French rivals, namely Renault and PSA Group that signed JVs with local companies.  The news of VW coming to Iran also follows recent news of its subsidiary Skoda Auto preparing to enter the domestic market.

In July, Tomas Kubik, the spokesman of Skoda Auto, announced that the Prague-based compa­ny has explored the Iranian market and believes that its vehicles will suit the budget of Iran’s middle-class consumers.  Volkswagen’s plan for Iran may follow the well-tried model of its other emerging market operations, which has several subsidiaries and strategies catering for different consumer demands in those regions.  From China and India to Brazil and Argentina, VW has numerous production plants manufacturing parts and vehicles.  Brazil could also be the new model for Iran, as the GDP of both countries remains in the same bracket. The company might use the same industrial and economical template for the Islamic Republic.  Vehicles pro­duced by Volkswagen in Brasil include Golf, Voyage, Fox, New Savario and Jetta.

The Chinese version of Volkswagen, which caters to that market (like making longer rear pas­sen­ger doors for Chinese preference) could also be a possible contender for Iranian wallets.  Con­sidering the strong financial ties between Iran and China and the profitability of the Chinese approach to the industry, Volkswagen might find the Chinese template more appealing.

 Private Vs. State-Owned

The VW deal comes in stark contrast to other recently signed auto contracts, including those with Renault and PSA Group.  While Renault has signed a deal with state-owned Industrial De­velopment and Renovation Organization of Iran and Peugeot forged a joint venture with IKCO, the unprecedented approach of the VW can be a real game changer in Iran’s auto industry.  At present, Iran is exporting vehicles and parts to other emerging markets like Iraq, Afghanistan and Azerbaijan.  The VW-Mammut Khodro deal will enable Iran to target the regional market, too, as the foreign partner is obliged to export 30% of cars produced in joint ventures with Iran.

According to the latest figures released by the Statistical Center of Iran, the unemployment rate in the first quarter of the current Iranian year (started March 20) showed a 1.4% increase com­pa­red with the corresponding period of last year and a 0.4% rise compared with the previous quarter to reach 12.2%. The SCI put Q1 labor force participation rate, i.e. the proportion of the population ages 10 years and above that is economically active, either employed or jobless, at 39.5%. The data also show 10.3% of men and 20.3% of women of ages 10 and above were job­less in spring.  Furthermore, according to SCI, the unemployment rate was 13.7% for urban are­as and 8.3% for rural areas. Moreover, an unemployment rate of 24.9% was recorded for the youth between 15 and 29 years.

Iran was a reliable credit partner that kept agreements as a rule, says Germany’s visiting Eco­no­my Minister Sigmar Gabriel

German firms have signed 10 business agreements with Iranian partners during the fifth session of Iran-Germany Economic Commission in Tehran on Monday.  The European country’s Vice Chan­cel­lor and Economy Minister Sigmar Gabriel and his Iranian counterpart Ali Tayyebnia at­ten­­ded the session.  Several German Mittelstand firms, the small- to medium-sized companies that form the backbone of the economy, had signed deals with Iranian partners, including SMS group, a builder of steelmaking plants and INTRA industrial solutions, Reuters cited German Eco­nomy Ministry as saying.

Mitsubishi Germany signed a contract to modernize a gas-fired plant, while plant constructor Kel­ler HCW wants to build a brickyard in Iran.  Both countries’ central banks have also agreed to a technical cooperation deal. There was no detail on the size of the agreed deals.  Industrial gi­ant Siemens AG and automaker Daimler will be among the first German firms to benefit from op­portunities in Iran, but they are proceeding carefully and only after legal reviews.  The Ger­man banking sector has been reluctant to underwrite business deals for fear of falling foul of re­maining US sanctions imposed on Iran over non-nuclear issues.

 Reminder to the US

Speaking at the opening of an economic forum at Iran Chamber of Commerce, Industries, Mines and Agriculture headquarters in Tehran on Monday, Gabriel said Germany wanted to “remind the United States of the commitment to get to an effective dismantling of sanctions”.  “Ger­ma­ny wants to help Iran push ahead with reforms,” he said, adding that he believed the Islamic Re­public was a reliable credit partner. “Our aim is to support the current government with its path to opening up to the world.”  The visiting German minister stressed, “Iran was a reliable credit part­ner that kept agreements as a rule.”  “Iranians have always thought highly of German peo­ple,” said the head of ICCIMA, Gholamhossein Shafei, adding that his country is after improved eco­nomic, cultural and technologic relations with the European country.

 The Balancing Act

As many as 37 business representatives from prominent German companies, including Siemens AG and Volkswagen, accompanied the minister on the flight to Iran and more joined him once the plane landed in Tehran, Deutsche Welle reported.  Another 37 journalists will be on hand to record how the minister, who is also the head of Social Democrats, manages a 48-hour balan­cing act.  The purpose of the trip is to “position the German economy one year on from the nu­cle­ar agreement”, said Rudolf Gridl, who specializes in the Middle East and North Africa at the Eco­nomy Ministry. “We are very confident that contracts or letters of intent will be signed.”

Ger­many’s relations with Iran have changed dramatically in the past year. After years of Iran’s economic sanctions, negotiations between Iran and the five permanent members of the UN Se­curity Council (Russia, China, the United States, France and Britain) plus Germany succeeded in a wide-reaching easing of sanctions in return for the country’s pledge to scale back its nuclear pro­gram and submit to international inspections.  Once the agreement was reached, Gabriel be­came the first EU minister to visit Iran and other German politicians have been quick to re­vive the previously good relations between the two countries.

“There’s a very large interest from the German side,” Gridl said. “All the German federal states have already sent delegations separate from this trip happening now.”  The main lingering pro­blem is that the United States has only partly relaxed its sanctions. Iran can export oil and gas again, as well as access long-frozen assets, but a US embargo remains in place. That makes in­ter­national banks and business, including some in Germany and France, hesitant to invest in Iran.  A dozen years of sanctions have resulted in Iran’s banks lagging behind international stan­dards. “The federal government tries to provide Iran technical help with regard to bringing its ban­king sector up to speed,” Gridl said.  There are high expectations, especially in the power, trans­port and health care industries. Many of Iran’s hospitals are dilapidated and require inter­national knowhow.