Why French Carmakers are real Winners of Iranian Protectionism

The Iranian market is significant for French carmakers such as PSA. Incorporating sales from its joint ventures and license agreements in Iran, it last year recorded a 5.8% increase in sales and deliveries globally. Without the Iranian market, its sales would have been down by 2% compared to 2015.

As such, PSA’s increased sales in Iran propelled its overall growth, securing its market position. Moreover, PSA recently acquired General MotorsOPEL, a car popular in Iran during the 1990s, to become Europe’s second-largest automaker. As such, the Iranian market boosts PSA’s position as a major car exporter.

In this vein, other European car manufacturers are following the French model in bypassing import barriers in Iran. Germany’s Volkswagen has discussed plans to launch an assembly line Iran, in a joint venture with private carmaker Mammut Kodro.

However, the road from talks to an actual presence in the Iranian market is long. For now, Iran remains the domain of French automakers, with tariffs to protect their Iranian partners ending up securing a monopoly for foreign partners.

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