Germany missing the start in Iran?

Few days after the nuclear deal between Iran and 5+1 Group was signed Sigmar Gabriel, Economic Minister, heading a German business delegation, visited Tehran in June 2015. Many thought that Germans want to be a leader in establishing new collaborations with Iran.


Today after a year, it seems that French and Italian companies are much more eager to explore the opportunities of doing business in Iran. Might the US-sanctions be a reason for German slow movements?


While the two French carmakers, Peugeot and Citroën, have already established their joint-companies with the two largest Iranian carmakers, Iran Khodro and Saipa, there is no sign of serious interest from German carmakers, despite the fact that German cars are very popular among Iranians.


In less than two years, more than 300 foreign business delegations visited Iran. These delegations are mainly SMEs with no experience of working in Iran. They use the opportunity to visit Iran personally and get a feeling beyond the lens of the media.


However, for the large companies the purpose of their visit is different. Many of them like, BASF, SMS Group, Siemens, Merck were working in Iran since decades before the sanctions; they have a deep knowledge about the country if not talking about all their old contacts.

These companies are looking to resume their old business with the hope of expanding it.


Although German companies are negotiating various topics, but compared to French and Italian activities in Iran, being conservative may cause them losing some big opportunities.


Another example is the huge investment Iran is doing on buying new aircrafts; indicating the potentials in related infrastructural fields, such as airports. The Italian company, SEA, operating Milan-Malpensa Airport, has made a deal to build a unique terminal at the most crowded Iranian airport, Mehrabad Airport, located in Tehran.


The second largest airport of Iran, Mashad Airport, will be renewed by French. This is while Mr. Aghqei, Head of Finance of Airports Company of Iran, confirms that no German company has shown interest to take part in other projects.


But is this slowness because German companies tend to be more conservative or is it mainly because of the US sanctions?


Tight collaboration that German companies with American partners have, could well lead to keep them away from this new virgin market. This is the story of Wincor-Nixdorf, who lately emerged with its American rival Diebold to become Diebold-Nixdorf.


Although in January 2016 the regional manager of Wincor-Nixdorf, Mr Gomess, in Tehran expressed that this joint venture will lead to providing better services, but now it has caused the German part to pull out from the Iranian Electronic Banking sector, where majority of ATMs were built by Wincor-Nixdorf.


The new ones however may come from other countries but not from Paderborn.