Iranian components division, SAPCO (Supplying Automotive Part Co) says it is dramatically increasing the localisation of content to build IKCO's new Peugeot 405-based pick-up truck next year as supply from the French automaker starts to dry up.

Both the European Union and the US have imposed severe sanctions against Tehran including the banking sector, which have led Peugeot in particular to suspend shipments to its IKCO partner.

"There are some problems now in Peugeot delivery about parts, but we are very urgently and very quickly localising direct sourcing from other countries," SAPCO (Supplying Automotive Part Co) development department project manager, Mohsen Alikhani, told just-auto from Tehran.

"Peugeot has not stopped supplying parts but [it] has been diminished, it is reduced."

And while IKCO concedes there are some "fluctuations" in supply, it remains confident of starting the the new pick-up production early next year.

"[The] 405, we have been producing models for lots of years," said Alikhani. "Next year, yes, we are developing a new model with a new interior.

"Of course we have localised the parts of the 405 for the new model - we don't have serious problems. There are some limitations... [but] we have not stopped production as a result of the sanctions, only some problems, only some fluctuations."

IKCO also remains bullish any switch to locally-produced components will not hugely affect the level of quality it is able to offer. "We have looked to be moving on a confident road in the quality field," said Alikhani. "We have not defined any lower threshold for quality."

SAPCO's acknowledgement a reduction in component imports from sanctions-imposing countries was radically altering its supply chain, was backed up by recent comments to just-auto by PSA that it had suspended 206 and 405 parts shipments to Iran, although the automaker has left the door open to a possible restart in September.

The sanctions have targeted Iranian finance in particular, with a PSA spokesman in Paris confirming to just-auto: "We have suspended in the first half - because of sanctions we have suspended...this delivery.

"Because [of] the banking sanctions, there is no more financing possible with the Iranian banks."

The issue is enormously sensitive with both PSA and its mooted new alliance partner, General Motors, as the sanctions against Iran are designed to dissuade Tehran from developing what some maintain is its proposed enrichment of uranium for nuclear weapons.

Powerful US lobby groups such as United Against Nuclear Iran (UANI) have specifically targeted Paris and and Detroit by highlighting the "taxpayer-funded US$50bn bailout of GM" in order to pressure both parties.

The Iranians and French have previously estimated the halt in shipments to be costing around US$10m per month.

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