Peugeot begins reimbursing Iran

TEHRAN, Aug. 20 (MNA) – An official at Iran’s Ministry of Industry announced that France’s Peugeot has begun compensating for its previous contract with Iran.

Amir Hossein Ghanati, Director General of Automobile and Automotive Industries Department at the Ministry of Industries, Mine and Trade, said the French company will make amends for all losses of earlier deals on the basis of a signed contract while the Iranian Ministry requires that both parties fulfill their obligations in full.”

“Peugeot will fully recompense Iran though not necessarily in cash payments,” underlined the official asserting “the amount will be paid to Iran in the course of the agreement together with other obligations like implementation and installation of production lines as well as sales or exports.”

Ghanati also noted that Iran Khodro Industrial Group and Peugeot Car Company officially launched a joint venture company over a month ago and the training of human resources, as part of the compensation process, will begin soon.

CEO of IKCO Hashem Yekkeh Zare had previously pointed to the signing of a contract with Peugeot of France enumerating several features of the deal; “it brings foreign investment into the country, leads to job creation, increases level of production to the interest of auto part makers, and brings about technical knowledge transfer as suggested by the Leader in line with Resistance Economy, as well.”

Yekkeh Zare has emphasized “one important feature of the contract is the establishment of a joint venture between the Iranian and French sides where the profits will be shared; during the first year, only 40 per cent of the produced cars are indigenous while the figure will reach 70 per cent leading to positive balance sheet on the part of the company.”

“Peugeot had left Iran in 2011 and we have set punitive contracts for the French company,” highlighted the official noting “the company is obliged to pay 427.6 million euros as compensation as well as that Peugeot’s final business share will be the very low figure of only 15 per cent.”

“Following several tough negotiations with the French automaker, it was agreed that a portion of the loss be compensated in cash payments while a large portion of that will be covered in a different package comprising training of human resources and optimizing of existing production lines among the others,” he underlined.

Yekkeh Zare went on the maintain that IKCO will also keep the 69 million euros which were supposed to be paid to Peugeot for car productions before and after sanctions.

The official further enumerated various ways by which the French automaker will reimburse Iran indirectly including supplying of auto parts for older cars (worth 25mn euros), providing production line equipment (11mn euros), deploying experts to optimize existing products (worth 4mn euros) as well as training of IKCO personnel (worth about 1.6mn euros).

“Meanwhile, an amount of one million euro will be paid to the Iranian company to be spent on optimizing systems and executive tasks,” stressed Yekkeh Zare adding “the royalty price for Peugeot platforms will also decrease from 150 to 100 euros for each product.”

“The discount on royalty price of various IKCO products will yield a total revenue of 140 million euros for the next year’s output,” concluded the official.

By Mehr News Agency