In a major case of international pressure (or bullying, which is how I look at this issue), Peugeot and Citroen of the PSA Group have both had to exit the Iran market in order to avoid new sanctions initiated by the US government. This is after the latter withdrew from a key nuclear deal with Tehran.
PSA rushed into the Iran market in 2016 after the previous sanction was lifted, and established deals with two Iranian auto companies, Iran Khodro and SAIPA. It was a rewarding gamble as in 2018 PSA sold almost 445,000 vehicles in the country making Iran one of its biggest markets outside France.
However, the French firm also indicated that the operation in Iran represents less than one per cent of its turnover, thus this retreat does not alter the current financial situation, nor its objectives in the ‘Push to Pass’ plan.
The Iran Khodro and SAIPA businesses are 50/50 joint ventures between PSA and the two companies, each manufacturing and distributing Peugeot and Citroen vehicles respectively. The Iran Khodro joint venture was said to invest more than €400 million in manufacturing and R&D over five years beginning 2016.
SAIPA is another 50/50 partnership with a planned investment of €300 million for five years from 2016, and with 150 new Citroen outlets opened within the same duration.
The Iranian TIV was 1.6 million vehicles back in 2011 with a projected 2 million vehicles annually by 2022. PSA estimates that the current number of Peugeots on Iranian roads should reach four million units.
Conversely, Peugeot has been absent in the US market since 1991 (Citroen since 1989). But PSA is reportedly interested in re-engaging the American market although with low-volume models. Plus, they are looking into a ride-sharing model.
