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Peugeot Returns to Iran After Sanctions Lifted

2 Février 2016 - Autoblog

Peugeot Returns to Iran After Sanctions Lifted

Peugeot has signed a deal to begin producing vehicles again in Iran in late 2017. The agreement makes the French company one of the first automakers to take advantage of recently lifted sanctions against the country, according to Bloomberg.

As part of the new agreement, Peugeot will invest $439 million in automaker Iran Khodro over five years to upgrade a factory near Tehran. By late next year, the plant will be able to build 100,000 examples of the Peugeot 208, 301, and 2008 annually. The site's capacity will eventually double, Bloomberg reports. Iran Khodro and Peugeot had a partnership going back to 1962, and before sanctions were lifted were 51-49 percent partners in their joint venture. Now, the partnership will be restarted on a 50-50 footing.

Iran Khodro is already an established player in Iran's auto market and the surrounding region. In addition to previous partnerships to build vehicles under contract for Renault and Mercedes-Benz, the company also produces its own models. According to the company's 2010 annual report, it had a 49.5 percent market share in Iran that year and sold a total of 765,468 vehicles.

In the wake of the sanctions, many foreign automakers left Iran, and experts predict the re-opened market could have a huge pent-up demand for new vehicles. The country also has a large enough middle class to support the industry. With the possibility of strong business in the region, expect to hear about more automakers returning there.

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