Iran to produce 40% of Peugeot auto parts inside country

Business Materials 1 February 2016 15:38 (UTC +04:00)

Baku, Azerbaijan, Feb. 1

By Farhad Daneshvar - Trend:

Some 40 percent of auto parts, used for car production in Iran, will be manufactured locally as part of a deal inked by the Islamic Republic and France, says Mohammad Reza Najafi Manesh, a member of Iran's Chamber of Commerce.

He said the French carmaker Peugeot will no longer be only a seller of auto parts to Iran for further car assembly there, Fars reported Jan. 25.

"Forty percent of the auto parts will be produced inside Iran," Najafi Manesh told the Iranian news agency.

During Iranian President Hassan Rouhani's visit to Paris on Jan. 28, Iran's Khodro and France's Peugeot signed a memorandum of understanding to establish a new joint venture in Iran.

The joint venture is expected to manufacture Peugeot 208, 2008 and 301 models.

Najafi Manesh said it is expected that the joint venture, with 400 million euros worth investment, will produce 200,000 cars in Iran annually.

Iranian side will put 50 percent of investment, while the remaining 50 percent will be put by Peugeot.

Thirty percent of the produced cars will be sold inside the country, and the rest of them will be exported.

Peugeot stopped cooperation with Iran in 2012 due to western sanctions. During the pre-sanctions era, Iran's biggest carmaker Iran Khodro was assembling Peugeot vehicles.

In 2012, the partners sold 473,000 vehicles.

Iran has capacity to produce 1.5 million cars a year, but it plans to increase this volume to three million cars a year by 2020.