Swedish truckmaker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran.
“With all these sanctions and everything that the United States put (in place) … the bank system doesn’t work in Iran. We can’t get paid … So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of the 2015 Iran nuclear deal, have forced companies across Europe to reconsider their investments there.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Persian Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
The head of Volvo Trucks was reported to have told Iranian media that he expected 5,000 Volvo trucks to be assembled locally in the year to March 2019 and that Saipa Diesel would begin to produce three Volvo truck models domestically.
Ivarsson did not know how much of this target had been delivered on. However, he said Volvo had no active orders in Iran as of Monday.
(Source: Tasnim, under Creative Commons licence)