China set to fill vacuum left by French carmakers exiting Iran

Al-Monitor | : As Iran’s auto industry is grappling with a multifaceted crisis, there are signs that China’s nascent carmakers may step in to become part of the solution.

The US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and the impending reimposition of sanctions have not only caused a currency crisis in Iran but also led French automakers such as Peugeot and Renault to leave the Iranian market, creating a shortage of parts.

The auto sector is Iran’s second largest industry, valued at an estimated $26 billion. It is made up of both private and state-owned enterprises engaged in vehicle production as well as 1,200 businesses that are involved in making parts. Despite the presence of a multitude of companies, Iran’s auto industry is in fact rather exclusive. Indeed, the two main state-owned companies, Iran Khodro and Saipa, control more than 90% of production and sales. Now, however, both of these companies are facing a crisis that primarily stems from the US withdrawal from the JCPOA.

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