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Peugeot

Peugeot

Industry: 
Automotive
Symbol: 
EPA:UG
States: 
NJ
Country: 
France
Contact Information: 
Sources: 

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"Last week, Qorbani announced that Benz, Volkswagen, Volvo, Fiat, Rover, Skoda, Renault, Peugeot, Kia and Toyota would take part in the Iranian auto expo, adding that the US car-manufacturers would also join the event. 'In case of desirable conditions, General Motors and Ford companies will also attend the event.' He continued that some leading car parts makers, including Siemens, FORD Mendo, Busch, FRW and ACI would attend the gathering. The event will start work on December 10." (Fars News, "55 Giant Int'l Carmakers, Part-Makers to Participate in Iranian Auto Expo," 11/2/14)

 

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“Iran’s leading auto manufacturer, Iran Khodro Company (IKCO), has announced plans to cooperate with French automakers Renault and PSA Peugeot Citroen to produce four new vehicles in Iran. IKCO Chief Executive Officer Hashem Yekkeh-Zare said on Saturday that the Iranian carmaker will produce Peugeot 301 and Peugeot 2008 as part of its mutual cooperation with PSA Peugeot Citroen. He added that Iran Khodro and Peugeot will establish a joint venture with equal shares for car manufacturing...The developments came after the two French automakers showed interest in taking back the significant market position they enjoyed before the US-led sanctions on Iran were toughened in 2012 over the country’s nuclear energy program.”(Fars News, "IKCO to produce 4 new vehicles with Renault, Peugeot," 8/3/14)  

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“Iranian carmaker Iran Khodro has set conditions for French giant Peugeot to return to the Iranian market. Iran Khodro Managing Director Hashem Yekkeh Zare' said Peugeot should end its assembling works and focus on manufacturing products jointly with the Iranian company, Iran's Mehr news agency reported on May 5. We want them to transfer technology to us and establish research and development centers in Iran, Yekkeh Zare' said. We are ready to resume cooperation with Peugeot only if it accepts this framework, he noted. The French car makers Renault SA and PSA Peugeot Citroën SA have taken initial steps toward resuming deliveries to Iran, previously one of their biggest markets.” (Trend, “Iranian carmaker sets conditions for Peugeot to return to Iran,” 5/5/14)

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"The boss of French carmaker Peugeot Citroen has held talks with his Iranian joint venture partner to consider returning to the country, the official IRNA news agency reported Monday. According to IRNA, the 10-hour meeting between Peugeot Citroen chief executive Maxime Picat and Hashem Yeke Zare, the boss of car manufacturer Iran Khodro, was aimed at exploring 'new scope for cooperation.' ‘Fulfilment of the previous commitments, transferring the technical know-how, mutual production of cars as well as selling Iran Khodro's vehicles through the French exporting network were discussed and reviewed during the meeting,’ the report said. The meeting took place last week, a source close to the talks told AFP.” (AFP, “Iran, France giant carmakers meet on resuming ties,” 5/5/14)

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“Hundreds of Iran’s 2,000 or so car part producers have gone bankrupt or switched to other areas of manufacturing and thousands of workers have been laid off in the past two years amid crippling sanctions imposed over the country’s nuclear programme. The sanctions caused a sharp drop in imports and led PSA Peugeot Citroën and Renault, the French car producers on which Iran’s car industry was dependent, to all but abandon the Iranian market…Renault, which was selling nearly 100,000 cars a year in Iran before sanctions came into force, was quick to resume shipments once the relaxation of sanctions came into effect. This has already led to a rise in daily production. Its rival Peugeot, which sold 458,000 cars in Iran in 2011 – nearly a third of the total market – is also poised to return to the country, which was once its second largest market after France. The new developments ‘have definitely energised the car production sector,’ said Mohammad-Reza Najafimanesh, a member of the Tehran House of Industries and Mines, a non-governmental body.” (Financial Times, “Iran’s automobile sector faces slow revival after sanctions lifted,” 2/24/14)

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"A visit to Iran by a large French business delegation drew a stern warning from Washington that most US sanctions remain in place and will be enforced even against allies. The 116-strong French delegation, with representatives from major companies like Total, Lafarge and Peugeot, was the largest of its kind from Europe since a landmark nuclear deal reached with the major powers in November gave Iran limited relief from crippling US and EU sanctions. French employers' union vice president Thierry Courtaigne said the delegation, which arrived in Tehran Monday, wanted to assess the commercial opportunities opened up by the easing of Western sanctions…The French were given a warm welcome by Iranian leaders, who promised new measures to encourage foreign investment, particularly in its oil and gas sector. In a speech to them, Deputy Oil Minister Ali Majedi said Iran's latest five-year plan, running from 2010-2015, calls for $230 billion of investment in its petroleum industry, of which $150 billion would go to upstream activities, according to the official IRNA news agency. He said nearly all downstream projects, for refineries and distribution, would be offered on a build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) basis.” (AFP, “French business push in Iran draws US sanctions warning,” 2/4/14)

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“France’s PSA Peugeot Citroen and Renault, in particular, stand to gain from renewing their once-sizeable Iran activities. The company is now following the situation with interest, said spokesman Pierre-Olivier Salmon. ’The group has renewed contacts to prepare a possible resumption of activities with Iran,’ he added.” (AP, “European businesses rushing to find Iran bonanza,” 1/22/14)

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“A delegation of some of France's biggest companies will visit Iran next month to seek business as relations thaw with western powers, the head of the employers' union said on Wednesday…The prospect of an easing of trade restrictions has whetted the appetite of French firms eager to win back business in a country where some used to have extensive operations. The French Medef bosses' association has organized the visit for February 2-5, its president Pierre Gattaz told a news conference, confirming a report about the trip in the Wall Street Journal…Former French ambassador to Iran Francois Nicoullaud told Reuters that French firms that operated in Iran before the sanctions wanted to return. He cited Renault, PSA Peugeot Citroen, Airbus Group , Credit Agricole, Societe Generale and BNP Paribas. Peugeot and Renault already sent executives to Iran for an automotive conference last year.” (Reuters, “French trade delegation to visit Iran next month,” 1/15/14)

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"Major carmakers and parts suppliers showed up in Tehran on Saturday to assess the Iranian market's 'considerable potential,' just one week after Iran's historic nuclear agreement with world powers. The International Conference of the Automotive Industry, the first such event in Iran, has brought together more than 150 companies from around the globe, according to organisers…Industry Minister Mohammad Reza Nematzadeh said he wanted 'more cooperation with foreign companies,' including French manufacturers Peugeot and Renault, both of which have had a long history of doing business with Iran…Peugeot, which left Iran in spring 2012, sold 458,000 vehicles the previous year in Iran. The French firm has renewed ties with its longstanding partner, Iran Khodro, said a source within Iran's top car manufacturer. 'We had good talks,' the source told AFP." (AFPCarmakers rev up for return to Iran market, 12/1/13)

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"The nuclear deal struck by Iran and six world powers will put more rubber on the road in the Islamic Republic. The country’s major carmakers stand ready to start receiving parts again from French firms PSA Peugeot Citroen and Renault when the sanctions ease. That could see Iran’s stalled car production again take off, proving a boon to local automakers and potentially draw in more foreign investment from other manufacturers hoping to break into the market…Iranian Industry Minister Mohammad Reza Nematzadeh said Iran’s biggest carmakers are now holding talks with PSA Peugeot Citroen and Renault in Tehran for new joint venture projects and joint car spare parts production. That will greatly help Peugeot, Europe’s No. 2 automaker, which saw its profits hurt by the sanctions. Peugeot sold more than 450,000 cars annually in Iran before the sanctions. Renault sold more than 100,000 cars in Iran in 2011 before pulling out. 'PSA Peugeot Citroen and Renault will offer new cars to the market with the help of their Iranian partners,' the minister said. 'They’ve been big contributors to Iran’s auto industry. Given the Geneva deal, we hope sanctions will be lifted by the end of December so that joint ventures with foreign carmakers can resume.'" (AP, "Iran nuclear deal hits gas pedal for carmakers," 11/30/13)

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"French carmakers Peugeot and Renault look to be among the clearest beneficiaries of the interim deal that lifts some sanctions on Iran, with both hoping to leap back into the Middle East's biggest auto market. One of the explicit concessions world powers made in the accord signed Sunday in exchange for Iran curbing its nuclear programme was the promise to 'suspend US sanctions on Iran's auto industry.' For Peugeot and Renault, which had to pull out of Iran in 2011 and 2012 respectively, those words are worth big money -- especially as both are struggling in a languishing European climate. PSA Peugeot Citroen was the top car manufacturer in Iran before the sanctions, selling 458,000 vehicles in 2011 in what used to be its second-biggest market worldwide after France. Its cars, most of them assembled by an Iranian partner firm and rebranded, are ubiquitous on Tehran roads…PSA Peugeot Citroen 'is closely following the development of the situation concerning Iran, but we are not about to resume our sales activities tomorrow,' a company spokesman told AFP in Paris. The effects of the Iran deal 'are still unclear,' he said. 'The day when the sanctions no longer exist, we could look at how to return to our activities.' The caution shown by PSA Peugeot Citroen stemmed in part by the fact that it has US group General Motors as a partner. That relationship was seen as instrumental in it having to quit Iran despite the heavy operating loss of around a hundred million euros ($135 million) it represented between 2011 and 2012. Also to factor in is the temporary and 'reversible' nature of the deal with Iran, which is to apply for a six month period during which the Islamic republic and world powers will try to reach a permanent and comprehensive pact. On Monday, shares in PSA Peugeot Citroen soared 4.45 percent to 10.68 euros in afternoon trade, while Renault shares rose by 1.15 percent. That reflected what Tangui Le Liboux, an analyst at the Aurel BGC brokerage, said was the 'good news' the Iran deal brought the companies. 'The two French carmakers were the best placed among all their European rivals before the imposition of the embargo in recent years,' he said. The two companies will have the opportunity this week to renew their Iranian connections this week. The French industry ministry has organised a conference on Saturday in Tehran bringing together all of Iran's car makers. Renault has confirmed to AFP it will attend. PSA Peugeot Citroen declined to comment." (AFP, "France's Renault, Peugeot seen to profit from Iran deal," 11/25/13)

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"Efforts by PSA Peugeot Citroen and Renault SA to boost sales outside Europe’s slumping car market stand to get a boost from a deal to lift sanctions on Iran…Peugeot, Europe’s second-largest carmaker, sold 458,000 vehicles in 2011 in Iran prior to the trade sanctions, making the country the automaker’s second-biggest market after France. Chief Financial Officer Jean-Baptiste de Chatillon said last year that the sanctions had cut 10 million euros ($13.5 million) a month from operating profit. 'Any indication that we could resume doing business with our partners in Iran goes in the right direction,' said Jean-Baptiste Thomas, a Peugeot spokesman. 'We’ll see how we can do that the day sanctions are lifted.' Peugeot shares rose as much as 5 percent to 10.74 euros and were up 3.7 percent at 11:00 a.m. in Paris. The stock has surged 93 percent this year, valuing the company at 3.76 billion euros." (Bloomberg, "Peugeot Set to Benefit Most in Europe From Iran Accord," 11/25/13)

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"UANI (United Against Nuclear Iran) group calls on Japanese car manufacturer Mazda and French Peugeot to end their business in Iran, UANI (United Against Nuclear Iran U.S. group) Communications Director Nathan Carleton told Trend. While a lot of car manufacturing companies have left Iran due to sanctions imposed on the Islamic Republic, according to Carleton despite the threat of sanctions, there are still some world-known car brands that do their business in Iran. Among them are Mazda and Peugeot…Speaking of Peugeot, Carleton said that despite Peugeot's claims to have stopped its auto shipments to Iran, its vehicles are still being produced there. Tehran Times reported in June 2013 that many Peugeot models are rolling off Iran Khodro (IKCO) production lines, as most of Peugeot models have been 100 percent localized. This is while in February 2013, Peugeot has posted the largest annual revenue loss in its history, partly caused by the West's sanctions against Iran. Iran was the French car maker's second-biggest market in 2011 in terms of trade volume. In February 2012, PSA Peugeot Citroen stopped its trade with Iran after the enforcement of US-led financial sanctions against the Islamic Republic for its nuclear energy program. The French car making group also halted its exports of vehicles to Iran, which accounted for around 13 percent of the firm's global deliveries in 2011. It cost the automaker the annual sale of half a million cars and an estimated 1.5 billion euros in revenue last year. 'UANI continues to call on Peugeot to explain why its vehicles are still being manufactured en masse in Iran, and take action to stop it," Carleton underscored. "According to Iranian production statistics, 203,639 Peugeot vehicles were produced in Iran during the Persian calendar year that ended March 20, 2013.'" (Trend, "UANI calls on Mazda, Peugeot to end their business in Iran," 9/16/13)

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"Iran Khodro (IKCO) says it is hopeful Iran's recent election of a new President will allow more partners - as well as its old Renault and Peugeot business allies - to have full operations in the country. Crippling sanctions - to which the new President Hassan Rouhani made reference in his first press conference yesterday (6 August) - have led Renault and PSA to suspend operations in Iran - but IKCO remains optimistic the situation can improve.'There is a hopeful environment - everybody knows this will be a new prospect - especially the car industry,' an IKCO spokesman told just-auto from Tehran. 'We have seen some foreign partners present in Iran, kind of suspended, but everybody here is very hopeful the new government and new environment will be started. So foreign partners will come to talk to IKCO - more than Peugeot and Renault - after the new environment new foreign partners come to negotiate with Iran.'" (Just-Auto, "IKCO holds out hope for more foreign partners as new President elected," 8/7/13)

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"PSA Peugeot Citroen ended parts shipments to Iran as European Union (EU) sanctions were imposed, but sources in the country have claimed IKCO was continuing to produce Peugeot vehicles using complete localisation. PSA said it no longer supplied parts to Iran, partly as as result of the difficulties in obtaining finance due to severe banking sanctions imposed by the EU and the US." (Just-Auto, "Iran: Renault Mulls New US Iran Executive Order as IKCO Claims CKD Clio Build," 7/23/13)

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"French automaker PSA Peugeot Citroen on Monday said its global sales plunged almost 10 percent in the first half of the year, mainly owing to a weak European market. France's leading but ailing automaker said in a statement that it sold 1.46 million assembled vehicles in the first six months of 2013, being hit hard by a shrinking European market share, which dropped to 12.2 percent from 12.9 percent a year ago. In February, PSA also saw its sales of component kit deliveries to Iran come to an abrupt halt following the tightening of international sanctions. A year ago, PSA sold 142,000 units of the kits to Iran." (AFP, "Peugeot sales dive in first half on weak European market,” 7/8/13)

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“Sources in Iran claim IKCO is continuing to produce Peugeot vehicles in the country despite PSA ending parts shipments as European Union sanctions continue to bite.  Exact figures are currently unavailable as to how many Peugeot models are rolling off IKCO production lines, but the source maintains localisation is the key to continued build.  ‘Most of them [Peugeot models] have been localised 100%,’ the source in Iran told Just-Auto. ‘For example, the 206 completely, this is the model being produced here.  There is no need to import parts and components - 206, 207 [and] 405 are being produced.’  The insistence IKCO is still able to produce Peugeot cars comes as the French automaker reiterated it no longer supplies parts to Iran, partly as a result of the difficulties in obtaining finance due to severe banking sanctions imposed by the European Union and the US.  ‘Because of the sanctions taken against Iran, we can't finance our activity there,’ a PSA spokeswoman told just-auto from Paris. ‘It is totally suspended.  We do not sell any more parts to Iran - we used to sell them to Iran Khodro. We have absolutely no other comment to make.’...Only two months ago, UANI said tens of thousands of Peugeot-branded vehicles were being produced in Iran, including nearly 204,000 during the Persian calendar year ending 20 March.  ‘Once again, we see evidence GM's partner, Peugeot, continues to do business in Iran,’ said UANI CEO, Mark Wallace, in April this year, although PSA insists it has stopped shipping parts…In June last year, PSA put its involvement with IKCO at 1.5% of its EUR79bn turnover.” (Just-Auto, Sources Claim Continued IKCO Peugeot Production Despite PSA Parts Stop,” 6/20/13)

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"Iran Khodro Co., the country’s largest carmaker, can manufacture all automobile parts that PSA Peugeot Citroen (UG) used to supply, Tehran Times reported, citing Chief Executive Officer Javad Najmeddin. Iran Khodro can construct parts for its Peugeot 206 and Runna passenger cars without backing from the French company, Najmeddin said. PSA Peugeot Citroen suspended sales of car assembly kits to Iran in February, local reports said on July 31." (Bloomberg, "Iran Khodro Says Peugeot Parts No Longer Needed, Tehran Times," 12/26/2012)

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"A French car manufacturer that is partially owned by the taxpayer-funded General Motors Company (GM) claims to have ceased its longtime business dealings with Iran, though experts have cast doubts on this claim. GM owns a seven percent stake in PSA Peugeot Citroën, which has faced intense scrutiny for its business relationship with Iran. Peugeot has long been one of Iran’s central auto partners, providing parts and technology to Iran’s leading car manufacturer, Khodro Company. Khodro is believed to have economic ties to the regime’s Islamic Revolutionary Guard Corps (IRGC). Although Peugeot and GM maintain the manufacturer “suspended" shipments to Iran in March, sanctions experts argue that the relationship has continued to flourish behind the scenes. 'We are still quite concerned with Peugeot’s business in Iran,' said Nathan Carleton, spokesperson for United Against Nuclear Iran (UANI), a nonpartisan advocacy group that pressures international companies to cease dealings with Tehran. 'While Peugeot has claimed to have suspended shipments to Iran, numerous reports show that parts are still arriving there and automobiles still being produced—since March 2012 more than 100,000 Peugeot vehicles have been produced in Iran,' Carleton said. Peugeot’s alliance with Iran is of particular concern to UANI and other observers due to GM’s stake in the corporation. 'In this holiday season, as charities compete for Americans’ generosity, Americans should know that thanks to GM’s partnership with Peugeot, a company funded with their tax money has effectively made its own charitable contribution to enrich a genocidal regime,' said Michael Rubin, a former Pentagon adviser on Iran and Iraq. As one of Tehran’s top trading partners, the GM-backed Peugeot is responsible for injecting billions into the Iranian economy, thereby frustrating Western efforts to sanction Iran for its nuclear enrichment program. 'The hundreds of millions of dollars that Citroen generates for the Iranian economy through taxes, fees etc., flows through the IRGC, the entity that runs the financial arm of Iran’s nuclear and terror programs,' said Mark Langerman, a financial adviser who is managing director at the Patriot Fund, an investment firm that shuns companies tied to Iran... Reports indicate that Peugeot’s cars were still being sold in Iran as recently as November. Peugeot’s claim to have 'suspended' its business with Iran does not go far enough, said UANI’s Carleton. 'Peugeot has never said that it will permanently leave Iran or taken any sort of stand against the Iranian regime,' he said. 'At best Peugeot has announced temporary suspensions of shipments but vowed that they might resume in a few months. That is not the point of sanctions or our campaigns. Peugeot must pull out of Iran.' Peugeot disputes its critics’ claims, stating that it is simply impossible for the company to continue its Iranian exports... Economic sanctions have made it virtually impossible for companies such as Peugeot to secure financial assurance on its deliveries to Tehran, the spokesperson said... Peugeot does not intend to resume business with Iran in the near future due to increasing economic sanctions, according to the spokesperson. The French carmaker has historically shipped parts to Iran’s Khodro, which then assembles and manufactures various Peugeot-designed automobiles. Peugeot has also co-developed certain model vehicles with Iran, which has the manufacturing capability to fabricate some of these cars domestically... Iranian press reports have indicated that the suspension of Peugeot’s car parts shipments have failed to cripple the country’s auto sector. 'Iran has succeeded to not only supply spare parts for Peugeot cars it manufactures, but also to design and market other cars,' Mohsen Salehinia, Iran’s deputy minister of industry, was quoted as saying earlier this year. Several Peugeot car models were 'still being sold in Iran' as late as November, according to Azerbaijan’s Trend News Agency. GM originally struck a deal to purchase seven percent of Peugeot in February, when the company was still dealing with Iran despite U.S. economic sanctions banning this type of activity. GM spent $400 million for its stake in Peugeot, according to reports." (The Washington Free Beacon, "Making Mullah Mobiles," 12/17/2012)

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"Such car brands as Nissan, Peugeot (sedan and hatchback), Toyota for several reasons, stopped their car manufacturing in Iran several months ago. Because French Peugeot Company and Iran Khodro stopped the co-operation, the manufacturing of Peugeot 206 in Iran has stopped. As for Nissan's Maxima brand, the giant car manufacturer from Japan halted its business in Iran after 11 years. However, in both cases with Nissan and Peugeot, several models are still being sold in Iran, such as Peugeot's 405 model, and Nissan's Teana. The report said that aside from Nissan and Peugeot, such car brands as Chinese Lifan, Mazda, Suzuki, and Hyundai are still being manufactured in Iran." (Trend, "Five reasons why Iran's car manufacturing suffers blow after blow," 11/27/2012)

 

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"On the other hand, Iran's major car producer Iran Khodro which had been a partner of France's Peugeot since 1989, had to close some production units and it raised its production prices by 10 per cent last month, while Iran's other major automaker Saypa increased its car prices by 18 per cent... Peugeot has not confirmed its alleged proposal to Iran officially, but regarding its increasingly financial problems, this seems believable, because Iran was Peugeot's second major market. PSA Peugeot Citroen Group, Europe's second biggest auto company, left Iran in February 2012, because of problems in financial transactions due to imposed sanctions on Iran's banking system. The financial situation for Peugeot is also not favourable. On Oct.24 the French auto company released its performance figures during the third quarter of 2012, saying in this period group revenues were €12.93 billion, down 3.9 per cent compared with the previous year. The French car manufacturer blamed financing problems for its February decision to halt sales to Iran, Peugeot brand's second biggest market following tighter international sanctions and the attendant financing difficulties affecting payments. It had warned about this earlier this month when announcing 8000 French job cuts and a plant closure. It is not clear how Iran would be able to eliminate payment problems en route of restarting cooperation with Peugeot, while western sanctions on its banking system remains unchanged, but in case the French company does return to Iran, it would not lead to a decrease auto prices in the country." (Trend, "Iran vehicle manufacturers eye PSA Peugeot Citroen as a reviver," 11/20/2012)

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"Peugeot is a partner of Iran Khodro, which manufactures the 405 and 206 models and whose output accounts for about 40 per cent of Iranian car production." (The Times of London, "Iranian car industry crippled by sanctions," 11/1/2012) 

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"But its population of about 75 million includes a sizeable urban middle class who have been avid consumers of foreign-made goods, including Samsung and Sony electronics and Peugeot cars." (Reuters, "Iran says it will cut imports of non-essential goods," 10/14/2012)

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"Last February, Peugeot, the French automaker that is a partner of Iran Khodro, Iran’s leading domestic automaker, withdrew from the country because of the strengthened Western sanctions." (The New York Times, "Data on Iran Dims Outlook for Economy," 10/12/2012)
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"Auto production in sanctions-hit Iran nosedived by more than 42 percent in the past six months, media reports said on Thursday, citing industry ministry figures. Some 459,440 vehicles were produced from March 21 to September 20, according to the figures, while production stood at 792,286 in the same period in 2011, ISNA news agency reported. The drop accelerated in the month from August 21 to September 20, with the ministry recording a 66-percent fall compared with the same period last year. Iran built more than 1.5 million vehicles last year. The report did not provide any explanation for the drastic drop. However, the decline coincides with a strengthening of Western economic sanctions against Tehran, and the halting of parts deliveries by French manufacturer Peugeot because of the punitive measures. Peugeot is a partner of top automaker Iran Khodro (IKCO), which manufactures the 405 and 206 models and whose output accounts for about 40 percent of Iranian automobile production... Citing executives, business daily Donaye Eghtesad said the decline was 'unprecedented for the past 20 years' and could create difficulties for the whole industry, including subcontractors, with plant closures and layoffs, if the government does not come forward with $1 billion in aid. The sector generates about 500,000 direct and indirect jobs in Iran, according to official estimates." (Agence Presse-France, "Iran car output plunges 42% amid sanctions," 10/11/12)

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"PSA Peugeot Citroen SA (UG.FR, PEUGY) and hundreds of smaller firms are feeling the sting of sanctions against Tehran as the French government withholds 220 million euros set aside by an Iranian bank for future payments for exports, due to a fear of harming Peugeot's alliance with U.S. auto-maker General Motors Co. . . . The French Treasury has refused to release any of the money previously set aside in a Bank Tejarat account in Paris to guarantee payments for exports. The deliveries had been committed before the European Union introduced sanctions on the Iranian commercial bank on Jan. 23, people familiar with the matter said this week. Although the EU had allowed a two-month period for completing ongoing transactions with Bank Tejarat, the companies are still waiting for the French Treasury to permit the funds' release. 

This is because the French government first wants to ensure that allowing the release of some of that money to Peugeot, for spare parts orders from Iran Khodro Co., won't jeopardize the French auto maker's alliance with General Motors, one person said. Iran Khodro Co. assembles automobiles from kits provided by the French company. 

General Motors became the second-largest shareholder in Peugeot in March, buying 7% for EUR240 million. The GM alliance with Peugeot--Europe's second-largest car maker after Germany's Volkswagen AG --also covers the joint development of new parts and platforms on which their brands will base new models. That is seen as a key advantage in attempts to revive the fortunes of the French car maker, which is struggling amid a downturn in the European automotive industry' . . .

Any release of letters of credit to Peugeot could complicate matters for the General Motors tie-up, because Tejarat is under sanctions in both Europe and the U.S., a person familiar with the matter said. This leaves the future of the French auto maker's business with Iran in limbo. Both Peugeot and General Motors declined to comment on the Tejarat funds. A spokesman for General Motors did say that Peugeot had made the decision to suspend the shipments of spare parts to Iran prior to entering the alliance. 'GM's agreement with Peugeot is fully compliant with US law governing trade with Iran, and is not intended to benefit Iran in any way,' the spokesman for the U.S. automaker said.

Peugeot's Iran business is particularly sensitive because the U.S. Treasury holds a stake in GM. GM said in February that the Treasury held a 31.9% stake. That could make the very institution that enforces sanctions in Washington an indirect beneficiary of Iranian business if Peugeot received payment from the Middle-Eastern nation. Yet while confirming Peugeot had suspended deliveries to Tehran for the time being, a Peugeot spokeswoman said the company has not permanently pulled out of Iran." (Dow Jones, "France Withholds Funds From Peugeot Over Iran Sanctions Fears -Sources," 8/21/12)

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"Iran’s main automobile company, Iran Khodro, says it is coping with a decision early this year by troubled French car maker Peugeot to halt exports of vehicle kits for assembly, according to reports on Wednesday. 'Iran Khodro has managed to become self-sufficient in producing 90 percent of the parts for the (popular Peugeot model) 206, and an effort is being made to use local suppliers for parts that were previously imported,' company director general Hossein Najari was quoted as saying. Peugeot’s parent company PSA Peugeot Citroen in February suspended its sales of car assembly kits to Iran, which had been its top export market in terms of trade volume up to then. The decision appeared to be tied to Peugeot’s alliance with U.S. group General Motors, and U.S. sanctions pressure on Iran over its disputed nuclear activities. The United Against Nuclear Iran group, an influential US anti-Iran lobby group, says Iran Khodro is affiliated with Iran’s Revolutionary Guards, which are subject to specific US sanctions . . . Its exports to Iran, where locally assembled versions of its 405 and 206 models are prevalent on the roads, represented up to 800 million euros in revenue per year before they were suspended, according to figures given in Tehran. Iran automobile production has dropped by a third in the past three months, mainly because of Western sanctions and Peugeot’s decision." (Al Arabiya, "Iran says coping with Peugeot exit," 7/25/12)

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"Iran's auto production fell by more than 36 percent over the past three months, the industry ministry was quoted by ISNA news agency as saying on Saturday, citing 'lack of money' . . . The decline coincides with the halt of parts deliveries to Iran by French manufacturer Peugeot because of Western sanctions. Peugeot is a partner of the main Iranian auto maker Iran Khodro (IKCO), which manufactures the 405 and 206 models, whose output represents approximately 40 percent of Iranian automobile production. They incorporate 5-10 percent of components imported from France. Peugeot announced in February it had stopped shipping to Iran and repatriated most of its staff. It cited difficulties created by the Western banking embargo against Tehran, which has complicated trade and caused a shortage foreign currency. IKCO's parts imports from Peugeot accounted for 700-800 million euros ($572-654 million) per year, according to figures available in Tehran." (Daily Star, "Iran auto production drops over past three months," 7/14/12)

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"Iranian components division, SAPCO (Supplying Automotive Part Co) says it is dramatically increasing the localisation of content to build IKCO's new Peugeot 405-based pick-up truck next year as supply from the French automaker starts to dry up. Both the European Union and the US have imposed severe sanctions against Tehran including the banking sector, which have led Peugeot in particular to suspend shipments to its IKCO partner.'There are some problems now in Peugeot delivery about parts, but we are very urgently and very quickly localising direct sourcing from other countries,' SAPCO (Supplying Automotive Part Co) development department project manager, Mohsen Alikhani, told just-auto from Tehran.'Peugeot has not stopped supplying parts but [it] has been diminished, it is reduced.' And while IKCO concedes there are some 'fluctuations in supply, it remains confident of starting the the new pick-up production early next year . . . SAPCO's acknowledgement a reduction in component imports from sanctions-imposing countries was radically altering its supply chain, was backed up by recent comments to just-auto by PSA that it had suspended 206 and 405 parts shipments to Iran, although the automaker has left the door open to a possible restart in September . . . The issue is enormously sensitive with both PSA and its mooted new alliance partner, General Motors . . . Powerful US lobby groups such as United Against Nuclear Iran (UANI) have specifically targeted Paris and and Detroit by highlighting the 'taxpayer-funded US$50bn bailout of GM' in order to pressure both parties." (Just-Auto, "IRAN: IKCO swivels component sights to local as PSA shipments start to dry up," 7/11/12)

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"Deeply conflicting views as to whether or not PSA Peugeot Citroen has halted shipments of vital components to Iranian partner, IKCO, are being set against a widening clamour in the US for General Motors to put pressure on its new French partner to end the relationship with Tehran. Iran Khodro insisted to just-auto this afternoon (19 June) shipments of parts were continuing into ports in the country, with the French automaker previously saying it had suspended delivery of components for the 206 and 405 models until July to comply with European Union and US sanctions. Into the fray has also stepped powerful American lobby, United Against Nuclear Iran (UANI), which has been applying intense pressure on GM and Peugeot with the US manufacturer now holding 7% of its French partner. Writing two weeks ago in the US, UANI CEO, Mark Wallace, a former US ambassador to the United Nations noted: 'We again call on GM and Peugeot to take the responsible action of evaluating Peugeot's business in Iran and putting a complete and final end to it.' However, in calls made by just-auto to Tehran today, IKCO insisted ships were docking in Iran, as shown by the production lines continuing to run.'The evidence shows shipments is continued,' reliable sources in IKCO told just-auto. 'There is not any problem in shipments of Peugeot product parts - shipments of Peugeot are continuing here.' However, PSA remains adamant it has stopped supplying ICKO in accordance with the strict sanctions regime, adopting a robust position concerning Paris' position with Tehran, although it left open the possibility business could restart in September." (Just-Auto, "IRAN: IKCO and Peugeot at loggerheads on Tehran shipments," 6/19/12)

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"ISACO Chief Executive Officer Behzad Zahiri...said that IKCO has not yet received any official announcement from Peugeot indicating a halt in their mutual cooperation...Currently 10 to 15 percent of spare parts required for IKCO cars are supplied by Peugeot. In case Peugeot stops spare part supply, the required parts could be easily replaced by domestic suppliers or suppliers from other countries. Last year, 37 percent of the needed...The French auto-manufacturing group PSA Peugeot Citroen has suspended operations at one of its factories in northeastern France because of a halt to shipments of spare parts from Iran. PSA Peugeot Citroen reportedly stopped its trade with Iran on February 20 after the enforcement of US-led sanctions against the Islamic Republic for its nuclear energy program. Iran was PSA Peugeot Citroen’s second-biggest market in 2011 in terms of trade volume" (PressTV, "ISACO ready to supply spare parts if Peugeot imposes sanctions," 4/19/12)

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"The Fars branch CEO Mohammad Javad Habibi said the company produces one car per hour and it is expected to exceed five units this year. The unit has produced 250 Peugeot Pars sedans since the beginning of the mass production. Roughly 100 employees are working in the company, while the increase of production would create 150 job opportunities in every working position.  The company is IKCO's fifth local production site, the total investment for which rose to almost 60,000,000 dollars.  Production capacity of IKCO in Fars exceeds 30 thousand cars in a year. All types of Peugeot 405 sedans are currently mass produced in the company."  (Payvand, "Iran Khodro's Fars branch to produce 15,000 Peugeot Pars," 4/15/12)

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"In March, General Motors said its French partner, PSA Peugeot Citroën, suspended shipments of vehicle components to an Iranian carmaker, in compliance with US laws governing trade with Iran. Peugeot supplied parts to Iran Khodro, the country's biggest carmaker... They also say it is likely Iran Khodro has considered replacing Peugeot with other suppliers, but do not rule out the short-term difficulties that such a supply disruption could cause." (Financial Times, "Iranian Car Industry Weathers Stormy Year," 5/8/2012)

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"An influential US anti-Iran lobby group on Wednesday called for newly tied General Motors and Peugeot to shut down Peugeot's Iran business due to Tehran's suspect nuclear program.  The United Against Nuclear Iran group said GM's new investment in PSA Peugeot Citroen should be investigated to see if it violates US sanctions on Iran, because of Peugeot's strong market position in the country. "As a working partner and now official stake-owner of Peugeot, GM owes it to its investors and customers to compel Peugeot into ending its business in Iran," said UANI head Mark Wallace, a former US ambassador to the United Nations.  "By doing business directly with the Iranian regime, Peugeot supports the regime's ability to develop its illegal nuclear weapons program, support terrorist proxies and repress the Iranian people." (AFP, "Anti-Iran lobby hits GM-Peugeot deal," 3/29/12)

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"General Motors Co. said Wednesday that its French partner, PSA Peugeot Citroen SA, has suspended shipments of vehicle components to an Iranian car maker, and that its alliance with Peugeot "is fully compliant with U.S. law governing trade with Iran." GM has faced criticism from United Against Nuclear Iran, a group founded by a former U.S. ambassador to the U.N., and others opposed to the Iranian regime for agreeing to buy a 7% stake in the French car maker, because Peugeot has in the past supplied parts to Iranian car maker Iran Khodro.  GM, in a statement, said "we have discussed this issue with Peugeot. We understand that they made the decision to suspend the production and shipment of material into Iran some time ago--before we entered into our alliance with them in fact--and have decided to continue with that suspension. Our agreement with them is fully compliant with US law governing trade with Iran, and is not intended to benefit Iran in any way." (Wall Street Journal, "GM Says Peugeot has 'Suspended' Shipments to Iranian Car Maker, " 3/28/12)

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As of 2007, Peugeot automobiles represent 64% of the cars manufactured by Iran Khodro Company, the largest automobile manufacturer in Iran (AFP, Iran car maker says French politics hampering ventures, 10/8/2008).

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GIANTS WITH A FOOT IN TEHRAN: Total, Shell, Statoil, BNP Paribas, Commerzbank, MTN, UPS, Linde, Technip, Nokia, Ericsson, Peugeot, Renault, OMV, Societe Generale, ENI, Mitsubishi, Sumitomo, Siemens, LG, Samsung, Bosch, Valeo, Nestle, Unilever, BAT, Japan Tobacco. (The London Times, American pressure threatens UK firms, May 27, 2006)

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