Tehran, Iran, June 11
By Kamyar Eghbalnejad - Trend:
The secretary of Iranian Specialized Manufacturers of Auto Parts Association (ISMAPA) said PSA, the maker of Peugeot and Citroen cars, may return to Iran’s market not in the too distant future.
France's PSA Peugeot Citroen suspended its activities in Iran mainly due to the existing problems with foreign currency transfer as well as line of credit to finance its projects in the country, Arash Mohebbi-Nejad told Trend on June 12.
He added that this suspension does not mean an end to Peugeot’s cooperation with the Iranian car industry.
“The French car maker is negotiating to secure a waiver from the new US sanctions, and it may return to Iran and resume its activities if the problems are addressed,” the official said.
Referring to the G7 summit recently held in Quebec, Canada, amid escalation of tension over trade, Mohebbi-Nejad said, “The high tension between Europe and the US has increased the probability that the French automaker will return and re-establish its foothold in Iran’s market.”
PSA has become the latest French company to suspend its joint venture activities in Iran, despite promising to stand its ground in the face of sanctions. A statement attributed to the car maker said PSA “began the process of suspending the activities of its JVs in order to comply with US law by August 6, 2018” when the sanctions are about to snap-back into place.
PSA and its French rival Renault were among the first European companies which rushed to Iran to tap into a pent-up demand for new automobiles after sanctions were lifted on the country in 2016. PSA signed production deals worth 700 million euros with Iran, while Renault announced a new plant investment to increase its production capacity in Iran to 350,000 vehicles a year.
Elsewhere in the interview, Mohebbi-Nejad pointed to a letter recently sent by France’s FIEV car equipment lobby group to Iran and said, “FIEV has said in the letter that it will not leave Iran after 25 years of joint cooperation."
On June 6, FIEV canceled a July trip to Iran in light of current tensions between the United States and other European powers over the 2015 nuclear deal between Tehran and world powers.
“The trip has been canceled and replaced instead by a meeting in France of our Iran club, so that we can reflect upon how to proceed in light of current events,” said FIEV president Jacques Mauge.
The Iranian official concluded that the Iranian auto parts industry is now grappling with the problem of sanctions, stressing that compulsory determination of the prices is the main problem that auto parts manufacturers have to face.
In a speech from the White House on May 8, US President Donald Trump accused Iran of sponsoring terrorism and seeking nukes before announcing the US withdrawal from the nuclear agreement between Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany), known as the Joint Comprehensive Plan of Action (JCPOA).
Trump also said he would reinstate US nuclear sanctions on Iran and impose "the highest level" of economic bans on the Islamic Republic.
The new US sanctions will take six months to kick in, but a number of European companies have already halted their businesses in Iran despite verbal pledges by their governments to protect them against any fallout.
