PSA Uses French Elegance Link to Push Upscale DS Brand in Iran

European automakers including PSA, Renault and Volkswagen are eying the Iranian market following the country's deal with the West to end sanctions.

Paris-based PSA hopes to gain an advantage by capitalizing on Iranians’ association of France with luxury and elegance.

“French luxury values find a very strong resonance in Iran, and the Iranian market holds great promise for the DS brand,” Arnaud Ribault, the brand’s sales and marketing chief, said in a statement.

DS Automobiles will begin sales of three models, the DS 5 ad DS 5LS cars and the DS 6 crossover, in the “coming months,” DS said in a statement, adding that other models will follow.

The brand has formed an alliance with Iran car retailer the Arian Group, which will import, distribute, and offer aftersales service for DS’s models through its ATI Motor subsidiary.

“The DS brand stands for design, technology, refinement and French elegance,” Daryoush Biria, president of Arian Group, said in the statement.

Industry watchers expect the Iranian auto market to expand as new investment pours into the country following the end of trade sanctions. The country has a population of almost 80 million and is Middle East's largest car market.

IHS Automotive forecasts that new-car sales will reach 1.2 million this year from 1.1 million last year and bounce back to 1.6 million in 2016, the same as the number as their 2011 peak before collapsing under sanctions.

PSA and Renault are seeking to resume local manufacturing in Iran. PSA's Iran sales peaked at 458,000 vehicles, nearly 30% of the market, before it halted deliveries four years ago under pressure from then-partner General Motors.

DS will open its first store in the Iranian capital of Teheran. DS launched an Iranian-language Website earlier this month at www.driveds.ir.

PSA revived the DS badge for a range of near-premium models five years ago. DS became a stand-alone brand in April last year.

PSA and rival Renault also use the popularity of France's luxury fashion brands to help win sales in China.