Peugeot finalizes new joint venture deal with Iranian carmaker

Business Materials 1 March 2015 14:44 (UTC +04:00)

Baku, Azerbaijan, March 1

By Fatih Karimov - Trend:

Peugeot has finalized a new joint venture deal with Iranian carmaker Iran Khodro.

Iran Khodro Managing Director Hashem Yekkeh Zare said the deal cannot be compared with any of the previously signed contracts between the two sides, Iran's Mehr news agency reported on March 1.

Based on the deal, Peugeot is obliged to export 30 percent of cars which are manufactured jointly, he said.

If the French carmaker does not meet the obligation, the domestic sale of its products will be also stopped, he noted.

The deal will turn Iran into a hub of car exports in the region, he said.

Iran Khodro had set a target of producing 600,000 cars in the current year, which ends on March 20, he said, adding that the company has so far produced 567,000 cars. The output is projected to be 600,000 cars next year, he noted.

In May 2014, Yekkeh Zare said Peugeot should end its assembling work and focus on manufacturing products jointly with the Iranian company.

We want them to transfer technology to us and establish research and development centers in Iran, Yekkeh Zare said.

We are ready to resume cooperation with Peugeot only if it accepts this framework, he noted.

The French car makers Renault SA and PSA Peugeot CitroënSA have taken initial steps toward resuming deliveries to Iran, previously one of their biggest markets.

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.

U.S. sanctions on the auto industry in 2013 were the main cause, on top of American and European bans on Iranian bank transactions abroad.

But the auto sanctions were lifted last 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.