
PSA Groupe and Iran Khodro have inked the final joint venture agreement to produce vehicles in Iran, with Tehran’s Industry Minister recently confirming to just-auto 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%,” Iran industry minister, Mohammad Reza 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.
“Today marks a crucial milestone in our project with Iran Khodro,” said PSA Groupe EVP Middle East & Africa, Jean-Christophe Quémard.

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By GlobalData“The two partners conducted discussions as announced during President Hassan Rouhani’s visit to Paris in January this year.”
The agreement provides for:
• The creation of a joint venture on an industrial site in Tehran to produce new generation Peugeot vehicles on a platform, which will also be used by Iran Khodro to develop its own models.
• The capacity to export joint-venture products across the region.
• The restoration of contractual relations for the production of Peugeot-branded vehicles currently sold in Iran.
The first vehicles will exit the production line at the Tehran plant in the second half of 2017.
The Iranian market reached a peak of 1.6m vehicles in 2011, with PSA estimating it should regain this level and reach 2m vehicles a year by 2022. Current estimates put the number of Peugeot cars on the road in Iran at more than 4m.
The French automaker says Iran is a key component of its development strategy in the Middle East & Africa region, which is the PSA Group’s third-fastest growing international market.
“Yes, we are negotiating with several [car] companies and they are all welcome,” added Nematzadeh. “We would like to get contact to [the] international market and renew our technology.
“We are looking to export our cars and also our car parts. I think we have concluded an agreement with companies from Germany and France, with Swedish companies [for example], for heavy trucks and buses.
French association, FIEV and Scandinavian entity, FKG are among supplier lobby groups which have already trodden the road to Tehran.