Peugeot eyes Iranian manufacturing return

Posted on 17 Jul 2015 by Michael Cruickshank

French carmaker PSA Peugeot Citroen is reportedly examining a possible re-establishment of manufacturing in Iran.

The company is the first of many major corporations in the western world who are looking to take advantage of the recent Iranian nuclear deal.

This deal, struck on Tuesday, calls for the immanent lifting of economic sanctions on Iran, opening the door for all kinds of business opportunities.

In an emailed statement, Peugeot’s director for the Africa and Middle East region, Jean Christophe Quémard, said the new deal, and subsequent removal of sanctions “allows for a significant advance in our ongoing discussions.”

With sanctions lifted Peugeot is looking to again work with its former local production partner Iran Khodro.

Previously, Khodro had assembled older models of Peugeot cars which had mostly been pre-built in Europe, however with its planned re-entry into the market, the company plans to change this arrangement.

Ideally Peugeot would like to scale up the intensity of its manufacturing within Iran so that new vehicle models and engines would be entirely built within the country.

“This project will deliver a generational leap,” Quémard said.

Iran once represented Peugeot’s second largest market after France, with the company selling around 400,000 cars a year before being forced to pull out of the country in 2012.

Peugeot would be looking to capitalise on its well-known brand name within Iran before other larger competitors move in.

Iran a new market for global manufacturers

With the removal of economic sanctions, the stage is set for Iran to resume its role as a major consumer of manufactured goods.

Already companies like Boeing and GE are looking to re-enter the country after decades of absence, with the Wall Street Journal reporting that both companies have been in touch with potential Iranian distributors.

These companies are likely to be just the tip of the iceberg, with many global manufactures keen to find to new markets to replace those in much of the developed world that are already saturated with established brands.