Iran says new Peugeot contract compensates past loss

Business Materials 8 February 2016 21:12 (UTC +04:00)

Tehran, Iran, Feb. 8

By Mehdi Sepahvand -- Trend:

The newly signed Iran Khodro-Peugeot deal makes up for a previous loss the French company incurred on Iran by failing its commitments, Iranian Minister of Industry Mohammad Reza Nematzadeh said.

However, he noted, the new deal is secret and cannot be disclosed, Tasnim news agency reported February 6.

Peugeot withdrew its experts from Iran due to a new set of sanctions last April.

Peugeot had finalized a new joint venture deal with Iran Khodro in March.

Based on the deal, Peugeot was obliged to export 30 percent of cars which were manufactured jointly.

Iran has been demanding compensation for the loss incurred by Peugeot's withdrawal of its experts from the country.

Iran-Khodro was among the first Iranian companies to sign a deal with foreigners after sanctions were removed on January 16. The company signed a deal with Peugeot during President Hassan Rouhani's recent trip to France. The deal confirms a 50-50 venture production of cars in Iran by Peugeot and Iran Khodro.

Peugeot is the foreign company with the biggest share in the Iranian car manufacturing industry. In 2012, Iran's car production fell from 1.6 billion cars per year to 700 thousand as Peugeot stopped investing in Iran and halted parts export to the country.