Peugeot-Citroen, Iran Khodro in $450m Iran Deal

France’s PSA Group — maker of Peugeot and Citroen — and Iran Khodro (IKCO) signed the final joint venture agreement on Tuesday to produce latest-generation vehicles in Iran.

Commenting on the agreement, Jean-Christophe Quémard, Executive Vice-President, Middle East & Africa, said:

“Today marks a crucial milestone in our project with Iran Khodro. The two partners conducted discussions as announced during President Hassan Rouhani’s visit to Paris in January 2016. I am proud to be bringing the best in PSA Group technology to our Iranian customers.”

This 50/50 joint venture is expected to invest up to €400 million over the next five years in manufacturing and R&D capacity. This investment will contribute to the development of a competitive manufacturing base for producing, launching and marketing Peugeot 208, 2008 and 301 models, fitted with latest-generation engines.

The agreement provides for:

  • The creation of a joint venture on an industrial site in Tehran to produce new latest generation Peugeot vehicles, on a platform that will also be used by Iran Khodro to develop its own vehicles.
  • The capacity to export joint-venture products across the region.
  • The restoration of contractual relations for the production of Peugeot-branded vehicles currently sold in Iran.

The first vehicles will roll off the production line at the Tehran plant in the second half of 2017.

The Iranian market reached a peak of 1.6 million vehicles in 2011. It should quickly regain this level and reach 2 million vehicles a year by 2022. Current estimates put the number of Peugeot cars on the road in Iran at more than 4 million.

(Source: PSA)

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