Azernews.Az

Iranian carmaker Iran Khodro has set conditions for French giant Peugeot to return to the Iranian market.

Iran Khodro Managing Director Hashem Yekkeh Zare' said Peugeot should end its assembling works and focus on manufacturing products jointly with the Iranian company, Iran's Mehr news agency reported.

"We want them to transfer technology to us and establish research and development centers in Iran," Yekkeh Zare' said. "We are ready to resume cooperation with Peugeot only if it accepts this framework."

The French car makers Renault SA and PSA Peugeot CitroënSA have taken initial steps toward resuming deliveries to Iran, previously one of their biggest markets.

Renault and Peugeot executives met separately with Iran's Industry Minister Mohammad Reza Nematzadeh at an auto-parts fair in Tehran in late November.

The meetings came days after the signing of an accord between Iran, the U.S., France and four other countries, under which Tehran agreed to scale back its nuclear activities in exchange for some sanctions relief.

Renault and Peugeot were responsible for more than a third of the 1.6 million vehicles produced in Iran in 2011.

Iran produced 989,110 cars in 2012, which made the country Asia's eighth largest car manufacturer. Iran also stood at the world's 18th place.

Iran's automobile output faced 40 percent decrease in 2012. The country was Asia's 5th largest car manufacturer in 2011, with a total output of 1,648,505.

Increasing prices of raw materials and foreign currencies are the main problems that the car manufacturers are facing with.