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Iran Khodro: Peugeot yielded to all demands

2 November 2015 14:54



PSA Peugeot Citroen, which faces a backlash from its abrupt pullout from Iran in 2012, appears to have coaxed Iran Khodro into reviving their historic partnership.   

Iran was Peugeot’s second largest market before the French automaker left the country in breach of contract, idling a massive assembly line which manufactured vehicles from kits of parts.

Desperate for a return, Peugeot is aggressively pushing for a new partnership and Iran Khodro Managing Director Hashem Yekke-Zare says the carmaker has submitted to all conditions demanded by his company.

“Setting up a 50-50 joint venture, turning Iran to the regional center of Peugeot exports and transferring technology as well as investment were Iran’s conditions for cooperation which the company has accepted,” he said on Monday.

The remarks are a major climbdown from his previous tough talk that Peugeot must account for its decision to exit Iran before signing any new deals.

In July, Yekke-Zare said Iran Khodro was in talks with Renault and that the other major French carmaker could “become our main partner and eliminate Peugeot” while other Iranians demanded compensation.

A worker assembles a Peugeot 206 at the Iran Khodro plant near Tehran. ©AP

But the old partners are reported to have signed a letter of intent, waiting for sanctions to be lifted on Iran. Peugeot has reportedly accepted to build new plants and platforms, and transfer technology in return for a greater share of the market.

The company plans to sell 400,000 cars, including its luxury DS brand as well the Peugeot 208, which has proven a hit with Iranian customers, in addition to the compact Peugeot 301.

Before slamming the door in Iran Khodro’s face in 2012, the two partners sold 473,000 units. Peugeot quit Iran under political pressure following a partnership agreement with General Motors which the US company terminated later.

Iran is he Middle East’s largest car market and car making is the country’s biggest industry after oil. According to IHS Automotive estimates, Iran’s auto market is on course to average 1.7 million units in annual sales.

Western and Asian manufacturers from Germany, Italy, Japan and South Korea are exploring a return and the competition is already getting intense for a share of the upside.

In July, French Foreign Minister Laurent Fabius visited Tehran with a trade delegation after German Economy Minister Sigmar Gabriel traveled to Iran to discuss investments.

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