Today: 27 May 2019
Date: 1/30/2016      Time: 13:31
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The First Foreign JV in Iran's Car Production:

IKCO and Peugeot to Establish a Joint Venture in Iran

During Iranian President Hassan Rouhani's state visit to Paris, PSA Peugeot Citroën and Iran Khodro signed a joint venture agreement to produce latest-generation vehicles in Iran.

The contract targets at creating an Iranian-French JV with direct financial investment of Peugeot in Iran, transferring technology, producing up-to-date Peugeot cars and using the capacity to export JV products across the Middle East and North Africa.

This joint venture lays the foundations for a strategic partnership between the two companies. Based on this agreement up to €400 million over the next five years will be invested in manufacturing cars in Iran and the investment will contribute to facilitate the development of a competitive manufacturing base for producing, launching and marketing Peugeot 208, 2008 and 301 models, fitted with latest-generation engines.

Hashem Yekehzare IKCO CEO said in this respect, "IKCO and Peugeot will soon set up a new JV company which will manufacture latest-generation Peugeot vehicles based on a platform that will also be used by Iran Khodro to develop its own vehicles."

He also added IKCO would take advantage of these products' export market in the Middle East and North Africa (MENA region).

Referring to the current number of 4 million Peugeot cars on the roads in Iran, IKCO CEO claimed, "Some Peugeot cars are already being manufactured in IKCO and this new cooperation agreement will provide the ground for supervising the production of these cars besides reinforcement of after-sales service."

Commenting on this new agreement, Carlos Tavares, Chairman of PSA Peugeot Citroën's Managing Board, said: “This strategic agreement turns the page on the period of international sanctions and enables PSA and Iran Khodro to start a new chapter in their cooperation history. Our shared ambition is to offer our loyal customers high-tech products to deliver mobility that meets the highest comfort, safety and environmental standards.”

In the meantime, IKCO and PSA published a new press lease after signing this cooperation agreement as saying, "Coming one week after international sanctions were lifted, this agreement marks the beginning of a new chapter for both partners. The agreement, which will be backed up by technology transfers and significant levels of local content, will come into effect once it is implemented, i.e., around mid-2016. The first vehicles will roll off the production line at the Tehran plant in the second half of 2017."

According to Yekehzare, the strategic partnership with PSA will serve as a unique platform, for both parties to capitalize on each other’s competitive advantages; especially given the scale, technology and long term outlook that the parties are able to bring to their cooperation, bringing cost effective and the best automotive technology to the customers.

The Iranian market reached a peak of 1.6 million vehicles in 2011. It is supposed to regain this level within 2 years to reach 2 million vehicles a year by 2022.

Iran is a key component of PSA development strategy in the Middle East & Africa region, which is PSA Peugeot Citroën's third-fastest growing international market.

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