French automaker PSA Peugeot-Citroen is holding negotiations to resume its activities in Iran, two years after they were halted due to the West’s illegal sanctions against Tehran.
A top representative of the giant carmaker said in Tehran on Monday that the company is holding “intense” talks about the issue.
In late July, Iran’s leading auto manufacturer, Iran Khodro Company (IKCO), announced plans to cooperate with French automakers, Renault and PSA Peugeot Citroen, to produce four new vehicles in Iran.
IKCO Chief Executive Officer Hashem Yekkeh-Zare said the Iranian carmaker will produce Peugeot 301 and Peugeot 2008 as part of its mutual cooperation with PSA Peugeot Citroen.
He added that Iran Khodro and Peugeot will establish a joint venture with equal shares for car manufacturing.
IKCO will also manufacture Clio4 and Capture under an agreement with Renault, he said.
The developments came after the two French automakers showed interest in taking back the significant market position they enjoyed before the US-led sanctions on Iran were toughened in 2012 over the country’s nuclear program.
In February 2012, PSA Peugeot Citroën stopped its trade with Iran when the sanctions against the Islamic Republic were extended to the automobile sector. It also halted its exports of vehicles to Iran, which accounted for around 13 percent of the firm’s global deliveries in 2011. It cost the automaker an annual sales loss of half a million car and an estimated 1.5 billion euros in lost revenue last year.
Renault was forced in July 2013 to halt completely-knocked-down (CKD) shipments to Iran. It reported a huge fall in profits for the first half of 2013 after writing off the entire value of its business in Iran. The firm suffered a loss of 512 million euros (USD 680 million) after halting its activities in the Islamic Republic.
The automakers hope to return to Iranian market as Iran and the five permanent members of the UN Security Council – China, Russia, Britain, France, and the United States – plus Germany are drafting a final deal on the Islamic Republic’s nuclear program with a view to easing sanctions against Tehran.