Iran industry minister, Mohammad Reza Nematzadeh in media scum at SPIEF 16

Iran industry minister, Mohammad Reza Nematzadeh in media scum at SPIEF 16

Iran's Industry Minister has delivered a tub-thumping series of reasons why Western operations should consider reviving old ties or starting new ones in the post-sanctions era.

Only yesterday (21 June), PSA Groupe and Iran Khodro inked the final joint venture agreement to produce vehicles in Iran, with Industry Minister, Mohammed Reza Nematzadeh, recently confirming the deal mandated a minimum level of local content, with this eventually doubling.

"Peugeot will go up to 80% - it will start with 40% local content [and] go to 80%," Nematzadeh told just-auto on the sidelines of last week's International Economic Forum (SPIEF) in St Petersburg.

"Yes, we anticipate [that will apply to all automakers]."

The 50/50 PSA-Iran Khodro joint venture is expected to invest up to EUR400m (US$451m) during the next five years in manufacturing and R&D capacity.

The finance will see a manufacturing base for producing, launching and marketing Peugeot 208, 2008 and 301 models.

"Really, the conditions after sanctions [are] getting more favourable," said Nematzadeh. "In the last four or five months after this agreement [sanctions end], we have hundreds of new agreements and contracts.

"We have [the] highest security in the area by the people, not by the army. I hope we can have a better working relationship with Russia as well as other international companies.

"Our economy is growing after sanctions – two years ago we had positive growth and this year the World Bank expects about 4.4%. Industry is catching up...but still there is lots of room because Iran is a vast country."

Part of the theme of last week's panel: 'Life after Sanctions – Reintegrating Iran into the Global Economy' – was the reset between Moscow and Tehran which have both endured their own Cold Wars and economic sanctions.

"Our relationship with Russia goes back many years – we are neighbours," added Nematzadeh. "Unfortunately, economic cooperation, we are lacking, one reason was the sanctions period. Before, our trade relationship was much higher.

"Both countries are energy countries; in gas we are the largest and Russia of course, has lots of gas. We are now discussing in various areas, especially in the new political situation, which has come after negotiation with the 5+1 countries, including Russia.

"This is a good example for many countries in the Middle East and many parts of the world, which can come to [a] mutual win-win condition."