PSAs deal with IKCO could pave the way for other Iran auto agreements

PSA's deal with IKCO could pave the way for other Iran auto agreements

Iran Khodro says the percentage of localised components for its new requirements with Peugeot will gradually increase, following the lifting of sanctions, although it does not currently have a figure beyond the 40% already specified by PSA.

The Iranian automaker recently inked a US$436m joint venture deal with PSA, with the proviso 40% of components must be sourced domestically and the 50:50 joint venture will see a Tehran facility established to produce vehicles and whose platform IKCO will share to develop its own models, as well as the 208, 2008 and 301 Peugeot cars.

"IKCO is going to produce new models of Peugeot, so it needs to supply parts, mostly from foreign partners because they are new models," an Iran Khodro spokesman told just-auto from Tehran.

"Most percentage of parts provided are with foreign partners and then it will be localised and the percentage will be increased. The percentage of parts supplied by Iranian suppliers will be increased. I can't give any value."

Iran Khodro was also unable at the time of writing to elaborate on comments made by CEO, Hashem Yekehzare, in which he claimed PSA would pay EUR116m for "damage inflicted on current and past projects," as well as EUR311m in discounts and bonuses for future cooperation.

The startling comments were made shortly after the ink had dried on the deal with PSA, which is now subject to final evaluation before being due to close towards the middle of this year.

The IKCO chief equally outlined further details of what he says is financing provided for Peugeot's 207 model, while also claiming a significant amount of debt would be written off.

None of this information has yet to be confirmed by Paris, with PSA confining itself to noting the joint venture deal was still in a binding rather than closing stage, with the latter expected to be concluded by the middle part of this year.

"We have no more commentary, we are just launching an agreement which is good for the two partners, for IKCO, for PSA," a PSA spokesman told just-auto from Paris. "We are confirming it [joint venture] is an agreement – it is a good agreement.

Suppliers and OEMs could now start to form a vanguard of manufacturers jostling for position in Iran, with some estimates putting the market around 3m vehicles by 2025.

Key supplier bodies which have already trodden the road to Tehran include French association, FIEV and Scandinavian entity, FKG.

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