The logo of German luxury car maker Mercedes-Benz, a subsidiary of Daimler AG, is pictured in Munich, German. Picture: REUTERS
The logo of German luxury car maker Mercedes-Benz, a subsidiary of Daimler AG, is pictured in Munich, German. Picture: REUTERS

Munich/Berlin — Daimler dropped plans to expand its business in Iran after the US renewed a host of sanctions and President Donald Trump threatened to penalise companies doing business in the country.

The German car maker has suspended its "limited" activities in Iran until further notice because of the trade curbs coming into effect on Tuesday, the Mercedes-Benz maker and biggest commercial vehicles manufacturer said in an e-mailed statement. In 2016, Daimler moved fast to re-establish ties with Iran, signing preliminary agreements with Iran Khodro, the nation’s biggest automotive producer, to sell and produce trucks.

Since debilitating sanctions were eased in 2016, Iran emerged as a hotspot for growth and trade with Europe surged to more than $10bn. Now that the US has canceled a 2015 nuclear accord with the Islamic republic and re-imposed sanctions, companies are rushing back out. Last month France’s Renault joined PSA Group, which makes Peugeot and Citroën cars, in pulling away.

"We will continue to closely monitor the political developments, especially in connection with the future of the nuclear agreement," Daimler said, which hadn’t resumed sale or production of cars or trucks. The company ceasing to operate in Iran was first reported by Stuttgarter Zeitung.

Before dropping business in Iran in 2010 amid international sanctions against the country’s nuclear-research programme, Daimler had sold as many as 10,000 vehicles a year there3.

Bloomberg