French giant car-maker returns to Iranian car market
By Sara Rajabova
Following the easing of western-imposed sanctions on Iran, under the interim nuclear deal, foreign companies are taking steps to increase their activity in the Islamic Republic’s auto industry.
France’s giant carmaker PSA Peugeot-Citroen has reached an agreement with Iran’s leading car-maker, Iran Khodro - IKCO for the establishing of a joint car manufacturing factory in Iran.
Hashem Yekeh Zareh, the managing director of the IKCO said Peugeot will set up a joint factory with Iran Khodro, held 50 percent by Peugeot and 50 percent by Iran Khodro, Iranian media reported.
He added that based on the agreement, a joint research center will also be established.
Zareh said the new company will produce new car models, adding that 30 percent of the jointly manufactured cars will be exported, in keeping with the agreement.
He further noted that if Peugeot fails to export the mentioned figure, its share from Iran’s domestic market will decrease proportionally.
Europe's second largest automaker, PSA Peugeot Citroen stopped in 2012 its trade with Iran after the enforcement of U.S-led financial sanctions against Iran, which was one of the biggest markets of the company.
Iran's auto industry has suffered greatly from sanctions, with production plummeting and workers being laid off because of the ensuing economic slowdown.
Amid a series of U.S. sanctions, penalties against the auto industry and the banking sector were most felt by Iran.
The mentioned sanctions were lifted after an interim nuclear agreement was reached between Iran and world powers with a final accord still on the horizon, raising the prospect of better times for the industry.
Zareh further said Iran Khodro ambitions to produce 3 million cars by 2025. He added the company’s foreign partners including Peugeot, Renault, Suzuki and one other European company-which will join the cooperation by next year- will share almost 50 percent of the joint production.
The project’s aim to compete with Chinese manufacturers, explained Zareh. He said Iran Khodro is making efforts to take control of domestically manufactured cars from Chinese car producers, warning that the Chinese are seizing Iran’s car market.
He noted that Iran Khodro plans to manufacture cars with high quality and low price in comparison to Chinese cars.
The Chinese made their forays after the Europeans pulled out of Iran in the wake of intensified sanctions in 2011. They began with supplying semi-heavy and heavy trucks and passenger vehicles.
Iran’s auto industry is the biggest in the Middle East.
Iran Khodro is the biggest vehicle manufacturer in the Middle East, Central Asia and North Africa with a current production capacity of 600,000 vehicles per year. The company produces a variety of vehicles, including Samand, Peugeot and Renault cars, and trucks, minibuses and buses.
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Sara Rajabova is AzerNews’ staff journalist, follow her on
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