French Peugeot returns to Iran with €400 mln deal

PanARMENIAN.Net - French carmaker Peugeot will return to Iran in a partnership deal with a local manufacturer worth 400 million euros ($436 million), according to an agreement signed Thursday, January 28 during President Hassan Rouhani's visit to France, AFP reports.

The deal will see Peugeot work with Iranian manufacturer Khodro, with the first vehicles expected to roll off the production line in 2017.

It makes Peugeot the first Western carmaker to announce a return to Iran since sanctions were lifted against the country after it signed a deal to limit its nuclear programme.

Peugeot and its French partner Citroen will work with Iran Khodro to produce 200,000 vehicles a year using parts manufactured in Iran.

The aim is to produce the Peugeot 208, the 2008 sport utility vehicle and 301 compact models.

Peugeot pulled out of Iran in 2012 as Western sanctions imposed over the Islamic Republic's nuclear programme began to bite.

At the time, Iran was Peugeot's second-largest market after France.

With the lifting of the sanctions, Iran has signed a raft of commercial deals and Rouhani is also expected to tie up an agreement to buy more than 100 passenger jets during his two-day visit to France.

In an earlier report, Iran’s Transport Minister Abbas Akhoundi said Iran would buy 114 Airbus planes during the president's visit to Paris. Iran needs annual foreign investment of $30-$50 billion to reach an eight percent growth target and cash in on sanctions relief, the president said last week.