Quick to
return to a familiar market, the French company has sealed a joint-venture with
Iranian carmaker Khodro. Car production in the Islamic republic is expected to
surge following the lifting of sanctions.
Deutsche Welle, 21 June 2016
The French
carmaker Peugeot-Citroen (PSA) announced a joint-venture worth 400 million euro
($450 million) with its former Iranian partner Khodro in Tehran on Tuesday.
This makes
PSA the first Western carmaker to enter the Iranian market since economic
sanctions against Teheran were lifted in January, following an agreement over
Iran's controversial nuclear program. Iran was PSA's second-largest market
before sanctions forced it to pull out of the country in 2012.
The
carmaker has been eager to return. An initial deal was already agreed upon with
Iranian President Hassan Rouhani in Paris in January.
Iran's car
market is believed to be one of the world's most promising, as the country has
a relatively large middle class yet a low level of car ownership. Car
production throughout Iran fell dramatically due to the sanctions, and PSA
believes assembly lines are ready to be revved up again beyond their earlier
capacity.
Clear road
ahead
The
five-year, 400 million euro investment will go towards building out
manufacturing capacity as well as research and development. PSA and Khodra plan
to build a plant in Tehran where cars of both companies will be produced.
The 50-50
joint-venture aims to put cars on the road early next year and roll out 200,000
per year by 2018.
Peugeot's 2008 SUV model has been introduced to the Chinese market as well - also with considerable local investment |
Most parts
will be made in Iran. About 30 percent of the manufactured cars are expected to
be shipped elsewhere in the Middle East.
Allowing
the return of the Western firms has been a subject of some controversy among
conservatives in Iran, though Industry and Commerce Minister Mohamad Reza
Nematzadeh was happily on hand Tuesday.
He
expressed hope that a similar deal between Iran Khodro Diesel, a Khodro
subsidiary, and a German company, likely Mercedes, would be struck soon.
jtm/uhe (AFP, Reuters)