Scandinavian automotive supplier association, FKG's decision to lead a component delegation to Tehran has been swiftly echoed by Sweden's Enterprise Ministry setting up a permanent office in the Iranian capital.
FKG has been a strong advocate of reopening business ties with Iran and its visit last year has now been reinforced by Sweden establishing a Tehran office ahead of the widely-anticipated and imminent lifting of sanctions against the country, which could see a flood of automotive companies start to enter a territory once formerly off-limits for most Western businesses. (January 2016)
"Telephone enquiries from Iranian automotive companies wanting to undertake business with Scandinavian suppliers have already started to pour into Sweden following this week's historic nuclear facilities inspection deal with Tehran. The agreement thrashed out in Vienna comes laced with significant caveats surrounding whether or not Iran's nuclear programme is designed solely for domestic energy use and not destined for uranium enrichment for ultimate weapons production, but Scandinavian component body, FKG remains optimistic there is business now to be realised.
'They [Iran] have a good business with sub-suppliers and they have a similar organisation to us, but they are behind for years,' FKG managing director, Fredrik Sidahl told just-auto from Sweden. 'Their own companies need to very, very quickly come up [to the] same level as the rest of the world. Here is the situation where Swedish and German, whatever, companies, could assist in the name of both quality and business of course. [The telephone started ringing] yesterday. An approach would be to buy certain components for engineering manufacturing and they asked me where suppliers are in Sweden we could talk to.'
The Gothenburg-headquartered supplier chief noted FKG were 'not brokers' and would not organise individual contracts, but put the telephone request to the Scandinavian Iranian Chamber of Commerce, with which for example, it ran the recent visit to Tehran to gauge future business potential. 'We can't believe it - it has finally happened,' said Sidahl. 'We have to squeeze our arms [pinch ourselves]. If you see internal Iran, they now [have] 900,000 vehicles, which are old type vehicles. Before they were locked in they were 1.6m vehicles per year - there is a gap to close. It is a very good business opportunity for sure. They need to fix the banking system in Iran [however]. They need to line up their banking system outside Iran so you have an exchange rate which is official. Following FKG's visit to Tehran earlier this year, the move will be reciprocated by one in reverse from Iran to Sweden this November, with a trip currently being put together. Lifting of sanctions has also enthused FKG to organise a follow-up supplier visit to Iran taking 'a new troop of companies,' with opportunities for gear and axle-making businesses for example." (Just Auto, "FKG Pinches Itself as Sanctions Lift Sets Phone Ringing," 7/16/15)