PSA sees an opportunity ahead in an Iranian vehicle market and industry that is now opening up to foreign brands and investment

PSA sees an opportunity ahead in an Iranian vehicle market and industry that is now opening up to foreign brands and investment

PSA Group and SAIPA, Citroën's historic partner in Iran since 1966, have signed a joint-venture agreement to produce and sell Citroën vehicles in Iran. Production in Iran under the JV is planned to start in 2018.

This 50/50 joint-venture lays the foundations for what PSA describes as a 'strategic partnership' between the two companies. It said it will cover the entire value chain, from the design stage right through to vehicle marketing, including purchasing.

Manufacturing will take place at the Kashan plant in Iran, which will be 50% owned by PSA Group. This industrial site is described by PSA as the 'most modern of Iran with a flexible industrial process at the highest level of environmental standards (water-soluble paints for example)'.

The joint-venture will invest more than EUR300m in manufacturing and R&D capacity over the next five years. The agreement will be backed up by technology transfers and a significant level of local content.

Consistent with the core model strategy deployed in the Push to Pass plan, the production in Kashan of three vehicles adapted to the Iranian market will start in 2018. From early 2017, imported vehicles will be staging Citroën's 'comeback' in the country.

Citroën models will be sold throughout the country via a network dedicated exclusively to the brand. No less than 150 Citroën outlets will open in the next 5 years, PSA says.

PSA chief Carlos Tavares said: "With more than 50 years of presence in Iran, PSA Group through this new strategic partnership is clearly committed to the deployment of a rich product plan that meets the expectations of Iranian clients."

See also: PSA has big plans for Iran - Paris show