Volkswagen also returning to Iran alongside PSA Peugeot Citroen image

The German automaker, the largest in Europe and the second biggest in the world, announced it was taking its first steps towards entering the Iranian market following the Islamic Republic’s nuclear accord with the Western powers.

The VW Group pointed to the decision of having more lax economic sanctions to the country, which during the past four years blocked attempts by automakers to conduct any business in Iran. “We’re monitoring the current development and are leading first talks on a political level,” the company commented. “There are no decisions or resolutions yet though. Possible further steps will be determined by future developments.” Volkswagen would join French rivals PSA Peugeot Citroen – the former leaders of the Iranian auto market – as well as Renault in heading back to car selling in the country. PSA announced this week it was conducting advanced negotiations to establish a local joint venture for domestic production with a local peer, Iran Khodro. The JV would then produce vehicles from zero based on the company’s newest vehicle architectures and engines.

Volkswagen would need an automotive bridge into Iran, seen as one of the last major emerging markets, in a bid to lift deliveries outside more mature markets such as Europe and North America and make up for the losses from the Chinese cooldown and the collapse of Russian and Brazilian markets. The company has recently pushed into Africa by reintroducing small-scale assembly of cars in Nigeria earlier this month and is also mulling new manufacturing locations throughout Southeast Asia.

Via Automotive News Europe