PSA Peugeot Citroen Might Return to Iran image

After giant international automaker left Iran due to the sanctions on the nuclear programme, the country now relies on Peugeot to revive the auto industry here.

Iran currently has to deal with increasing production costs and lack of technology on how to manufacture vehicles, after the world’s most important automakers, such as Toyota, GM, Fiat, Hyundai and PSA Peugeot Citroen, were forced to leave the country due to the disputed nuclear programme. In September auto production in Iran dropped 66% from September 2011, and during the first half of the Iranian solar year, which began on March 19th, auto production fell 42%.

Iran Khodro, which is Iran’s major automaker and Peugeot’s partner since 1989, had to raise production costs by 10% in October and close several plants in the country, wile Saypa, another important automaker, raised vehicle prices by 18%. During the first half of the solar year prices went up 35%, according to Iranian ILNA.

On November 18th, the Iranian Industry Committee announced that Peugeot might return to the Iranian market, which would mean an increase in the country’s car input. Although Peugeot has not yet officially confirmed this plan, its situation in Europe might force the automaker to make this step, also taking into consideration that Iran was its second major market.