Iran ‘central’ to regional plans of French carmaker PSA

Iran will play a “central” role in French carmaker PSA’s strategic plans for the Middle East, the head of the manufacturing group said Wednesday on his first visit to the country.

“Iran is central to the implementation of the strategic growth plan of the PSA group,” Carlos Tavares said during a visit to its local partner, Iran Khodro.

The trip cemented a 400-million-euro ($448-million) deal signed in June for the two companies to resume their old partnership, which was cut short by international sanctions in 2012.

The sanctions were a major blow to the French carmaker, since Iran was its second-biggest market by volume after France.

Visiting Iran Khodro’s sprawling factory in Karaj, 20 kilometres west of Tehran, Tavares said PSA “was also the victim of the sanctions. We also were prevented from doing what we wanted.”

A nuclear deal with world powers came into force in January, lifting many sanctions and paving the way for companies to return to Iran, even if concerns remain over political and financial risks.

June’s 50-50 deal created IKAP (Iran Khodro Automobiles Peugeot) which plans to produce three vehicle types, starting in 2017 with the small urban 4×4 Peugeot 2008. The mid-size 301 and small five-door 208 will follow shortly after.

PSA aims to reach 200,000 units by 2021, and it hopes to meet the Iranian government’s wish of exporting 30 percent of the production.

“Iran is going to be the number one sourcing base for this region,” said Tavares, reiterating PSA’s goal of selling a million units across the Middle East by 2025.

“When we reach that number in 2025, 75 percent of this production will be produced in the region… and of course Iran will be the number one producer,” he added.

That compares with a total production for the group that stood at three million units in 2015.

tq/er/hc