Hyundai has followed PSA Peugeot Citroen in halting its business dealings with Iran, where it had extensive operations, including a joint venture to make cars.

United Against Nuclear Iran, an American group that has advocated economic sanctions to pressure Iran over its disputed nuclear programme, has reclassified Hyundai Motor, putting it in the 'withdrawn' category on a list the group has compiled of foreign businesses that deal with Iran, according to the New York Times.

Hyundai did not comment on the report but a strict new American law is putting pressure on foreign companies to reduce or eliminate their operations in Iran or risk penalties in the US market.

Last week PSA Peugeot Citroen suspended shipments of components to the Iran Khodro Industrial Group, an Iranian vehicle maker, to comply with American restraints on Iran trade.