Renault seeks to gain the upper hand on PSA in Iran image

Post sanctions Iran will become the Middle East’s biggest auto market, so automakers are carefully rushing to set up shop in the country in a drive to gain the upper hand in terms of sales and profits.

Two of the eager players are France’s Renault and domestic rival PSA Peugeot Citroen, European automakers that enjoyed a very strong position in the country before the sanctions negated their businesses there. And Renault now seeks to become the top selling European automaker in post-sanctions Iran and drive past PSA, according to recent reports. The latter have hit a deadlock in securing a major agreement with partner Iran Khodro, the country’s biggest carmaker, after the French abruptly departed the country back in 2011. Sources claim Renault would use no less than $560 million in cash that was already in Iran to secure an advantage, following the recent international agreement that would see the sanctions against Tehran lifted.

Renault and its partner Nissan would see increased presence in emerging markets if they secure an advantage in Iran, but for PSA Peugeot Citroen, which has been mulling an expansion outside the home continent following a near encounter with bankruptcy the move is critical. And having 80 million consumers and 1.1 million autos sold last year makes Iran a mesmerizing target. But the two are also not alone, with Volkswagen also in talks to enter the Iranian market. And Renault has another advantage over the competitors – the ability to supply low-cost vehicle architectures. Volkswagen has been trying for years to add such platforms and PSA’s own equivalents would not begin reaching the markets until 2019.

Via Automotive News Europe