Wednesday, 20 November, 2019

France’s Peugeot-Citroen to Resume Production in Iran

France’s PSA Peugeot-Citroen is holding “intense” talks about resuming production in Iran, two years after they were halted due to the West’s sanctions against Tehran.

During an auto industry conference and exhibition held in Tehran on Monday, Jean Christophe Quemard, PSA’s operations director for the Middle East, said that the company is in “intense” talks about the issue.

“We are in intense discussions. We have a long relationship with Iran. We have the strong will to create a joint venture covering the entire automotive chain as soon as possible.” Christophe Quemard told delegates.

The company halted its production in Iran since March 2012, after international banking sanctions were imposed on Tehran as punishment for its disputed nuclear issue.

Iran was formerly Peugeot’s second largest market by volume and one in four cars in the country carries the Lion brand.

Discussions between Peugeot and its former joint venture partner, Iran Khodro, began at the Paris Auto Show in October.

Total car production in Iran was 1.6 million in 2011, but by two years later with sanctions biting it had halved.

The organizers of Monday’s auto conference want to attract foreign investment — with a population of 77 million the Iranian market is seen as untapped — but the conditions of a partnership are likely to change.

Under new joint deals, the industry ministry wants 40 percent of production to take place in Iran in the initial phases, rising to 85 percent after five years.

Iran’s Industry Minister Mohammad Reza Nematzadeh said Monday that the country aims to reach a total production figure of three million cars by 2020.

The automakers hope to return to Iranian market as Iran and the five permanent members of the UN Security Council plus Germany are drafting a final deal on the Iran’s nuclear program with a view to easing sanctions against Tehran.

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