Scania renews public bus systems in Iran

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Scania Group Press Release  /  February 13, 2017

Scania has signed an agreement in principle with the Iranian province of Isfahan and Shahr-e Atiyeh investment company on the delivery of 1,350 buses for public transport for Isfahan and four other Iranian cities. The first of these new buses will be in operation at the end of 2017.

Two Memoranda of Understanding have been signed in Teheran, in the presence of the Swedish Prime Minister Stefan Löfven and the Swedish Minister for EU Affairs and Trade Ann Linde, by Henrik Henriksson President and CEO of Scania, Hamid Akbari Rad Member of the Board of Scania’s Iranian partner Oghab Afshan, the Governor of Isfahan and the Managing Director of Shahr-e Atiyeh.

There is a clear need to expand and renew public bus systems in Iran. With the two memoranda of understanding, Isfahan, 450 km south of Tehran, and four other leading and far-sighted Iranian cities, will get sustainable public transport solutions.

Scania and Oghab Afshan will supply Isfahan with 350 buses and in the frame agreement with Shahr-e Atiyeh, up to 1,000 buses will be financed.

Air pollution in Iranian cities has steadily increased in recent years, claiming lives and affecting quality of life, but also hampering economic activity. In cooperation with Iranian authorities, Scania has developed solutions that ensure that local emissions are kept to a minimum with the current fuel quality. The new buses to Isfahan and Mashhad are equipped with engine technology that offers the lowest emissions levels in the country.

Iran is one of Scania’s top ten bus markets globally. Privately owned Oghab Afshan has been Scania’s bus partner and distributor in Iran since 2000. The company employs close to 1,100 persons in its Scania operations, including 860 in the bus factory.

“Together with our partners, we have a strong presence in Iran with comprehensive industrial operations and an extensive service network,” says Scania’s President and CEO Henrik Henriksson. We look forward to developing this market even further to provide the best services and sustainable transport solutions to our customers.”

Iran continues to be an important market for Scania. Its two established and privately owned distributors Oghab Afsahan and for trucks, Mammut Diesel, have a solid presence in the country to service customers.

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Europe Doubles Down on Iran Deal as Trump Steps Away

Bloomberg  /  February 15, 2017

Before the platters of roast lamb and fragrant rice were served, visiting executives squeezed into the front room of the Swedish ambassador’s home in Tehran to applaud ambitious plans to restore Iran as a top trade partner.

The men and women representing companies including AstraZeneca Plc and truckmaker Scania AB had flown in with Prime Minister Stefan Lofven, who was making the first official visit to Iran by a Swedish premier since a mediation effort during the 1980s war with Iraq. The 75-member delegation was intent on doing business, but the politics was inescapable: as the U.S. under Donald Trump steps away from Iran, Europe’s moving forward, unwilling to throw away years of tortuous diplomacy.

“Before sanctions, Iran was the biggest export market for Sweden in the Middle East,” Trade Minister Ann Linde said at the Feb. 11 event attended by Iranian businessmen and ministers. “We hope it will be again.”

European leaders are emerging as strong backers of the 2015 six-nation nuclear deal with Iran, derided by Trump as one of history’s dumbest. They want their companies to prosper in a largely untapped market of 80 million people, but there’s a deeper motive -- to bolster the moderate politicians led by President Hassan Rouhani seen as the best bet for an Iran that’s freer at home and more willing to cooperate in defusing Mideast flashpoints. Russia, another signatory to the agreement, is a key ally of Iran.

May Election

“The Europeans want an administration in Iran that will stick to the deal and pursue a moderate engagement with Europe that has begun already,” says Ellie Geranmayeh, a policy fellow for the Middle East and North Africa program at the European Council for Foreign Relations. For a start, Rouhani, who broke Iran out of its isolation in 2013, faces a likely re-election fight in May with hardline opponents who are suspicious of closer ties with the West.

The moderates merit support, said a senior Western diplomat in Tehran, who requested not to be named in line with protocol. To help achieve that, states try to show their business communities that Iran is a good market to enter, he said.

The Swedish trade delegation was sandwiched between a high-level French political and commercial visit, led by Foreign Minister Jean-Marc Ayrault, and a Feb. 12 automobiles conference attended by senior executives from Peugeot, Citroen, Renault and Hyundai.

“I’ve been to Iran 25 times in less than two years,” Jean-Christophe Quemard, Peugeot’s executive vice-president for the Middle East and Africa, told reporters when asked if his latest trip was in any way motivated by Trump’s policies. “What does this mean? Times have changed. You need to get used to seeing our faces in Tehran.”

Bank Woes

Sanctions imposed on Iran over its disputed nuclear program slashed its trade with Sweden by 90 percent to about 1 billion krona ($112 million) in 2012. Among the documents signed during Lofven’s visit was a 110-million euro pact between Scania and Iranian heavy-vehicle maker Oghab Afshan to produce 1,350 buses. Hamid Akbari, a member Oghab Afshan’s board, said the company was in talks with three Swedish lenders for financing.

For Europeans turning up in Iran, pledging to boost business is the easy part. Delivering is harder, especially as sanctions not lifted under the 2015 accord -- primarily U.S. curbs punishing Tehran for its missile program and links to groups such as Hezbollah that America designates as terrorist -- continue to scare away major banks.