New Cooperation Agreement Between Iran Khodro and Peugeot Finalized

The CEO of Iran Khodro Industrial Group announced the 'finalization' of a new cooperation agreement between this company and the French car manufacturer Peugeot-Citroën. Hashim Yekezar stated on Sunday, March 1, that negotiations are also underway with a 'non-Asian partner' of Iran Khodro, adding, 'We will announce the name soon, but we are waiting for the nuclear agreement to be clarified so that we can operationalize our contracts.' According to Mr. Yekezar, the 'terms' of the new contract with Peugeot-Citroën are 'not comparable' to previous agreements with Iranian automakers. He described this contract as a 'joint venture' and stated that under this agreement, Peugeot is obligated to export 30% of the products produced jointly with Iran. He further noted that if the foreign party does not fulfill this export commitment, the sale of these joint products in Iran will also be halted. He added, 'Therefore, with the operationalization of this cooperation between Iran and France, the Islamic Republic of Iran will become a regional hub for car exports.' The CEO of Iran Khodro had previously stated on July 27 that this company plans to form a joint company with Peugeot-Citroën. Mr. Yekezar mentioned that based on this agreement, Peugeot-Citroën will export joint products through Iran Khodro. Meanwhile, Jean-Christophe Quémard, the operational manager of Peugeot-Citroën in the Middle East, stated on Tuesday, December 1, in Tehran that this French company is engaged in serious negotiations to resume its activities in Iran. Peugeot and Renault were among the largest car exporters to Iran, but in recent years, they halted cooperation due to sanctions against Iran. Previously, Iran was the second-largest market for Peugeot in terms of car production, and currently, one-fourth of the cars in the Iranian market bear the Peugeot brand. The U.S. added Iran's automotive industry to its sanctions list in 2013, but this part of the sanctions was lifted following a temporary agreement between Iran and global powers regarding Iran's nuclear program. Mohammad Reza Nematzadeh, Iran's Minister of Industries, Mines, and Trade, has also stated that Iran is determined to increase car production in the country to three million units per year by 2020. The number of cars produced in Iran in 2011 was one million and 600 thousand units. However, the effects of economic and financial sanctions have reduced production volume to less than half, with car production in 2013 dropping to 737,060 units. Additionally, according to Iranian customs statistics, Iran's car exports in 2013 decreased by over 80% compared to 2012, with Iran exporting about 11,000 cars that year.