UANI

"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)