Daimler on Monday said its trucks division had signed letters of intent with joint venture partners in Iran as part of the German truck maker's re-entry into the Iranian market following the lifting of international sanctions.

Iran has opened up as an export market following years of economic isolation as world powers lifted sanctions in return for Tehran's compliance with a deal to curb its nuclear ambitions.

Daimler said it would cooperate with Iran Khodro Diesel (IKD) and Iran's Mammut Group, establishing a joint venture for local production of Mercedes-Benz trucks and powertrain components, plus the establishment of a sales company for Mercedes-Benz trucks.

Furthermore, there are plans for Daimler to return as a shareholder in the former engine joint venture Iranian Diesel Engine Manufacturing Co. (IDEM).

Daimler Trucks intends to open a representative office in Tehran during the first quarter of 2016, the Stuttgart, Germany-based company said.

The first Mercedes-Benz Actros and Axor trucks could be supplied to the country in the form of CKD (completely knocked down) kits - or fully disassembled - before the end of the year, Daimler said.

In addition to the plans for Mercedes-Benz trucks, Daimler Trucks also sees great opportunities for its Mitsubishi Fuso brand - especially in the light-duty truck segment.

To open up this market, Daimler has signed a distribution agreement with Dubai-based Mammut Group is one of the Middle East's largest truck bodybuilders and distributors, for the Fuso brand.

Mayan, a unit of Mammut Group, will be responsible for opening up the Iranian market in close cooperation with Fuso.

Daimler can build on a long and successful history in Iran: The company has been present in the market with Mercedes-Benz trucks and passenger cars since 1953, interrupted only by the sanctions phase between 2010 and 2016.

Mercedes-Benz commercial vehicles are still present there and remain very visible on Iran's roads. Previously, Daimler sold up to 10,000 vehicles per year in Iran, most of them commercial vehicles.

Dr. Wolfgang Bernhard, a board member of the Daimler AG responsible for Trucks & Buses, said: "Daimler commercial vehicles have always had an excellent reputation in Iran. And right now, there is a huge demand for commercial vehicles, especially trucks."

"We plan to quickly resume our business activities in the market there. The signing of the letters of intent with our local partners IKD and Mammut Group are important pre-requisites to resume business quickly," he stated.

Despite the sanctions, Iran was one of the largest national economies in the Middle East, with a nominal gross domestic product (GDP) of $415 billion in 2014. Industry accounts for almost half of the Iranian national economy.

The potential is huge for Daimler as the Ministry of Industry, Mine and Trade has estimated that about 200,000 commercial vehicles will be replaced in the coming years – some 56,000 of them in the next three to five years alone, said Bernhard.

With its growth potential following many years of sanctions and the pent-up demand in the transport sector, Iran offers promising opportunities for Daimler Trucks, he added.-Reuters and TradeArabia News Service