Automakers are now in high gear trying to jump to the business opportunities presented by Iran as the country has signed a breakthrough nuclear agreement with western powers.
That means the sanctions against the country are soon to be lifted and the auto market flooded by the carmakers vying for leadership position – among them past auto leader PSA Peugeot Citroen and newcomers such as Volkswagen. On Tuesday, Tehran agreed to slow down its nuclear program and the western powers in return will cease the ongoing sanctions – there are still issues such as US Congress skepticism as the Israeli opposition lobbied frantically for the agreement’s rejection. Auto producers are among the first beneficiaries if the agreement prevails and have been planning – discretely or not – since late 2013 their return to the market, as limited talks resumed and some of the sanctions were abolished for the period. “Industry leaders are itching to get into Iran,” comments Thomas Wuelfing, from a consulting firm specialized in Middle East trade. The auto powers are treating Iran as “the last big emerging market”.
Just hours after the announcement of a final deal on Tuesday, France’s PSA already was showcasing a strategy to reintroduce Iranian production to secure and defend its past market leadership since before the sanctions became heavier four years ago. Iranian auto sales peaked at almost 1.6 million units back in 2011 before they succumbed due to the sanctions – with internal production collapsing by one million autos within two years and causing a loss of more than 100,000 jobs.