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Volvo Trucks to open Iraq factory in early 2013

by Stian Overdahl on Sep 12, 2012


Construction is underway on Zim Zam Spring Group's large Volvo Trucks service centre and warehouse in Baghdad (source: Volvo Trucks).
Construction is underway on Zim Zam Spring Group's large Volvo Trucks service centre and warehouse in Baghdad (source: Volvo Trucks).

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Volvo Trucks is planning to open a truck assembly factory in the burgeoning truck market of Iraq on April 1, 2013, as it looks to rebuild its presence in a market the Swedish truck maker once dominated.

The CKD (complete kit knock-down) assembly plant will be located in Al Iskanderiyah, 60km south of Baghdad.

Stefan Soenchen, vice president of Volvo Trucks Northern Africa & Middle East, told PMV Middle East that the total truck market for Iraq is currently 1500-2000 units per year, with demand for trucks to deliver basic services such as waste disposal, as well as long-haul freight and construction.

Much of the construction effort in Iraq is currently concentrated on building infrastructure – roads, electricity, water, and waste disposal - and the vast majority of trucks that are sold are bought by government ministries.

In July last year Volvo Trucks signed up Zam Zam Spring Group to be the importer of Volvo Trucks in Iraq, as well as signing a letter of intent to deliver 1000 trucks to the Iraqi Ministry of Transport and its related state companies by 2013-15.

Prior to the production factory opening, the Volvo Trucks’ importer will open a number of new service facilities, including a large centre in Baghdad with training facilities and a central warehouse, and a large service centre in Basra, both expected to be inaugurated in the final week of October 2012. A smaller centre in Erbil will open in December.

"Our ambition is always to deliver trucks, but when we decide to enter a market, the first thing is to develop the service network," said Soenchen.

"I can tell customers that before we assemble the first truck in Iraq, they can be sure that we have a brand new service network available, from the north to the south, with everything including competence training and driver development."

Sweden has a strong relationship with Iraq, said Soenchen, which is a particular impetus for Volvo Trucks to return to the country. Following the war, the Swedish Ministry of Trade has encouraged Swedish companies to do business in Iraq.

Prior to the Iraq wars Volvo Trucks had operated directly in Iraq, with market share of around 30%. A major competitor was Scania, who currently have a truck assembly plant in Al Iskanderiyah.  
 

 



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