Peugeot auto company demands to return to Iran

Following the economic crisis in Europe and western embargo, the French company Peugeot asks to continue working with Iran’s car industry.

Due to the western sanctions, Peugeot has stopped delivery of parts to local vehicle manufacturer Iran Khodro (IKCO). Peugeot is a partner of Iran Khodro, which manufactures the 405 and 206 models and whose output accounts for about 40 per cent of Iranian car production.

In February this year, Peugeot said it had stopped shipping to Iran and had also repatriated most of its staff in the country. Also, the automotive segment generates around 500,000 direct and indirect jobs in the country, official estimates suggest.

In July, the US based lobby against Iran managed to put pressure on Peugeot Citroen to quit Tehran, its biggest foreign market. This is while the French car market continues to shrink, and the spotlights are on markets across Asia.

European economic crisis led to widespread cutting job and also a decline in Peugeot sales. These elements made Peugeot to request to return Iran.

Iran was the 13th biggest car maker in the world last year, producing 1.6 million vehicles. But as sanctions bite, production has collapsed this year, down by 66 per cent in September.