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Iran's top carmaker CEO holds fresh talks with France's Peugeot

A file photo of a Peugeot car assembly line in Tehran

The chief executive of Middle East’s top carmaker, Iran Khodro, has held talks with France’s Peugeot as Iran prepares to welcome foreigners in light of sanctions relief for the Islamic Republic.

Hashem Yekke-Zare was quoted by Mehr news agency as saying that he discussed joint manufacturing of auto parts in Iran during his recent visit to Paris.

“Peugeot pulled out of Iran’s market due to the toughening of sanctions…Iran Khodro is seriously following up on damage incurred [following Peugeot's withdrawal],” he said.

“When we negotiate for new cooperation with Peugeot, we give assurances that national interests will be taken into consideration,” he added.

Yekke-Zare said Iran Khodro expects Peugeot to “invest in Iran and launch a research and development center.”  

According to previous reports, Peugeot will set up a joint factory with Iran Khodro, held 50% by Peugeot and 50% by Iran Khodro.

The planned joint factory would export 30% of its manufactured vehicles.

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.

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 Khodro plans to manufacture 3 million cars a year in 2025 to get a 60% share in Iran’s car market.

Iran Khodro is the biggest vehicle manufacturer in the Middle East, Central Asia and North Africa with the current production capacity of 600,000 vehicles a year.  The company produces a variety of vehicles, including Samand, Peugeot and Renault cars, and trucks, minibuses and buses. 

Peugeot is one of Iran Khodro’s oldest partners and several key vehicles jointly produced by the two – including Peugeot 405, Peugeot 206, and Peugeot 207 - are supplied to markets such as Azerbaijan, Iraq, Armenia, Uzbekistan, Turkmenistan, Syria and Afghanistan as well as the domestic market.   

In February 2012, PSA Peugeot Citroën stopped its trade with Iran when the sanctions against the Islamic Republic were extended to the automobile sector. It also halted its exports of vehicles to Iran, which accounted for around 13 percent of the firm’s global deliveries in 2011. It cost the automaker an annual loss of half a million car sales and an estimated 1.5 billion euros in lost revenue in 2013.


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