Iran begins production of new car with France’s Peugeot

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A Dena Plus rolls off the production line which opened on Dec. 16, 2017.
A Dena Plus rolls off the production line which opened on Dec. 16, 2017.

Iran Khodro (IKCO) has opened a production line for two new car models, including one jointly produced by France’s Peugeot SPA.  

The first Peugeot 207 and Dena Plus sedans rolled off the production line near Tehran on Saturday during a ceremony attended by Parliament Speaker Ali Larijani, Iranian news agencies reported.

Dena Plus is an upgraded version of the Dena sedan which Iran Khodro claims offers better safety, having two more airbags.

Peugeot 207 is the same as the Peugeot 207i, with a cargo compartment added to it. Iran Khodro produced about 15,000-20,000 units of Peugeot 207i in 2011 before production stopped the next year when Iran came under intensified Western sanctions.

The model, a supermini produced from 2006 to 2014, is based on the platform of the predecessor model, Peugeot 206, which was replaced by the Peugeot 208 in 2012.

PSA has signed production deals worth 700 million euros with Iran, while Renault has announced a new plant investment to increase its production capacity in Iran to 350,000 vehicles a year.

The French company has yet to start production of the Peugeot 2008 in Iran despite the launch of an assembly line in the country back in March.

As per the joint venture called the Iran Khodro Automobiles Peugeot (IKAP), 70% of parts for Peugeot 2008 will be supplied by Iranian manufacturers. The car’s body will also be produced by an IKCO subsidiary.

The deal requires production of more than 30,000 units this year but only four Peugeot 2008s have been produced so far, with IKCO having to import pre-owned cars for delivery from France.

The production line of Peugeot 2008 at Iran Khodro which began on May 2, 2017

Since the lifting of sanctions in January 2016, French automakers have piled into Iran’s resurgent market, helping turn around a period of slipping sales which occurred when they left the country in 2012.

On Saturday, Fars news agency cited data released by Renault as showing year-on-year growth of 54% in sales to Iran where the automaker sold 144,862 cars in the year up to November.

With US President Donald Trump having put the future of the landmark nuclear deal in doubt, Iran’s Ministry of Industry, Mine and Trade officials have tried to give assurances that the new contracts with the French automakers were watertight.

Both Renault and Peugeot withdrew from Iran in 2012 when the country came under the Western sanctions.

Deputy Minister of Industry, Mine and Trade Mohsen Salehinia said last month he was optimistic about foreign companies holding their ground in case the Americans toughened their measures against Iran.

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