Iran, Peugeot sign new agreement
Baku, Azerbaijan, Dec. 6
By Umid Niayesh - Trend:
Iranian car manufacturer Iran Khodro(IKCO) has signed a new joint venture agreement with French giant carmaker Peugeot, the managing director of IKCO, Hashem Yekeh Zareh said, Iran's Mehr news agency reported Dec. 6.
Yekeh Zareh did not unveil details of the agreement, but said Iran continues negotiations with foreign carmakers, adding that significant progresses have been achieved in the talks.
Yekeh Zareh said that Iran is also negotiating with a non-Asian carmaker, expressing hope that the talks will be finalized in next 4-5 months.
He said that French and German auto designers will begin their activities in Iran's auto industry in the new future. Earlier Yekeh Zareh said that the IKCO has signed a 4-year contract with a German auto designer, during which two new car models will be designed.
Jean-Christophe Quémard, Peugeot Operational Director of Middle-East and Africa said early in December that the company is interested in launching production lines in Iran benefiting from state-of-the-art technologies.
The company has the capacity to produce 300,000 cars in Iran, according to company's officials.
Foreign automakers seeking a return to the potentially huge Iranian market with the lifting of international sanctions will find the business environment has changed: former joint venture partners now want to play the game by their own rules.
Iran's auto industry has been a major casualty of penalties imposed over the Islamic republic's nuclear program, with production plummeting and workers laid off because of the ensuing economic slowdown.
Total car production in Iran was 1.6 million in 2011, but it was halved two years later, due to US-led sanctions on the country's auto industry.
But the auto sanctions were lifted earlier this year after an interim nuclear agreement was reached between Iran and world powers and a final accord is still on the horizon, raising the prospect of better times for the industry.
Two leading French carmakers of Renault and Peugeot used to supply about 100,000 and 458,000 kits a year for final assembly to Iran, respectively, before they had to leave due to the US-led sanctions.
Over the past two years, the two carmakers' production has plummeted almost 50 percent.