The joint company, IKAP, was inaugurated in Tehran on Tuesday June 21 in the presence of the Iranian Minister of Mine, Industry And Trade, IRNA reported.
The news comes after Peugeot-Citroen signed a €400m ($450m) joint venture with Iran Khodro. The new venture aims to produce 200,000 vehicles a year by 2018.
“This company is committed to Iran and through this Iranian company we show that we are really committed for the future and ready to invest in this country,” said Jean Christophe Quemard, director of PSA’s Middle East and Africa operations.
PSA was swift in announcing its Iran comeback after anti-Iran sanctions were lifted in January following a landmark nuclear agreement last July between Tehran and the permanent UN Security Council members plus Germany (P5+1) over the Iranian nuclear program.
“Today is the comeback of PSA to Iran. We are very proud,” PSA official added. The 50-50 joint venture will manufacture three models – the Peugeot 208, the 2008 sport utility vehicle and 301 compact – using parts mostly made in Iran, reports indicate.
Quemard also noted that the $450m will be invested over the next five years. The money will go into building manufacturing capacity in Tehran, as well as research and development, PSA said in a separate statement. Reports say Iran will export 30% of the cars produced by the new venture to the Middle East and beyond.
Iran’s Industry Minister Mohammad Reza Nematzadeh said at the ceremony that more auto joint ventures were on the way. “We are optimistic. We hope to hold a similar ceremony for one of Iran Khodro’s subsidiaries, Iran Khodro Diesel, with a German company,” he said, without naming the German company. Media reports however indicate Iran Khodro has been negotiating with Mercedes since January.
Iran is seen as one of the most promising markets for cars in the world. The country’s car production fell from 1.65 million units in 2011 to 740,000 in 2013, but PSA estimates that it will break the 2-million mark by 2022.