Iran’s major automaker SAIPA and France’s PSA Group have announced a deal to launch a joint-venture to produce and sell Citroen cars in Iran. 

Based on the deal, Citroen cars will be produced in Iran’s central city of Kashan at a plant which will be jointly owned by the two companies.

The agreement between Citroen and SAIPA – which has been the French company’s historic partner in Iran since the 60s – lays the foundations for a new strategic partnership between them.

The joint-venture will accordingly invest above €300 million in manufacturing and R&D capacity over the next five years.

“With more than 50 years of presence in Iran, PSA Group through this new strategic partnership is clearly committed to the deployment of a rich product plan that meets the expectations of Iranian clients,” Carlos Tavares, Chairman of the PSA Group Managing Board, has been quoted as telling the reporters after signing the agreement.

The agreement envisages the transfer of technology and a significant level of local content, Reuters reported.

Also, Citroen models will be sold throughout the country through a network dedicated exclusively to the brand. No less than 150 Citroen outlets will open in the next 5 years, Reuters added.

Consistent with the core model strategy deployed in the Push to Pass plan, the production in Kashan of three vehicles adapted to the heart of Iranian market will start in 2018, Business Wire reported. From early 2017, imported vehicles will be staging Citroen’s comeback in the country.

SAIPA, along with Iran Khodro, dominates Iran’s massive market of about 80 million people. It consists of seven manufacturers and roughly contributes at least 30% to the total car production in Iran at above 300,000 cars per year.

Iran is the Middle East’s largest auto market with a population of 80 million. The automobile industry is seen as Iran’s biggest non-oil sector, accounting for nearly 10% of the country’s gross domestic product (GDP).

The National Iranian Oil Company (NIOC) will sign the first of its new oil and gas contracts (IPCs) with a domestic firm on Tuesday, the managing director of the state-run company was quoted as saying by Fars news agency on Monday.

“Tomorrow NIOC will sign a contract with Setad Ejraye Farman Emam under the IPC to develop the second phase of Yaran field, and EOR (enhanced oil recovery) and IOR (improved oil recovery) contracts for Koupal oil field,” managing director of NIOC, Ali Kardor said.
Iran’s Tasnim news agency said the value of the new contracts is $2.5 billion.

TEHRAN- Iranian Minister of Industry, Mining and Trade Mohammadreza Nematzadeh and French Minister of Finance Michel Sapin in a meeting on Saturday emphasized expansion of trade and industrial relations between the two countries, Shata news reported.

In the meeting, which was held in the French capital following Iranian minister’s visit to Paris Motor Show 2016, the two sides also put emphasis on the necessity of benefiting from both counties’ potentials and capabilities for development of bilateral ties.

They also discussed the ways for promotion of bilateral cooperation in the trade and industrial sectors.

During Nematzadeh’s stay in Paris, Industrial Development and Renovation Organization of Iran (IDRO) and French multinational automobile manufacturer Renault signed a deal on making joint venture in Iran.

The deal was on the establishment of an engineering and sales office in Iran to support Iranian auto part manufacturers and also setting up a manufacturing plant in the country with the initial capacity of 150,000 cars per annum. The plant is scheduled to start production in 2018.

German Economy Minister Sigmar Gabriel, leading a 100-member delegation, will attend Iran-Germany business commission in Tehran on Monday and he also plans to take part in some meetings to be held in the building of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), Shana reported on Saturday.

The German minister says the commission will meet for the first time in 15 years, and forecasts concrete business deals will be announced, Reuters reported on Friday.
He is making his second visit to Tehran since the Islamic Republic reached a deal with world powers in July last year to lift economic sanctions imposed on Iran over its nuclear program, in return for curbs on its nuclear activities.
Industrial giant Siemens AG and automaker Daimler will be among the first German firms to benefit from opportunities in Iran, but they are proceeding carefully and only after legal reviews.
Exports to Iran jumped 15 percent in the first half of the year to 1.13 billion euros and could reach 4 billion euros in the full year, said Michael Tockuss, head of the Hamburg-based German-Iranian Chamber of Commerce.
One big issue for small- and medium-sized firms is the inability to secure letters of credit for shipments of goods, said Werner Schroeppel, managing director of IMO GmbH, which exports components for wind energy facilities in Iran.
Schroeppel’s firm is now using third parties to do business in Iran, but hopes the process can be streamlined so it can take part in an expected boom in Iran’s wind energy sector.
The Europaeische-Iranische Handelsbank AG in Hamburg offers such instruments already, but Germany’s two biggest banks, Commerzbank AG and Deutsche Bank AG said they remain cautious.
Michael Sabet, an Iranian-German business executive whose company imports tons of saffron from Iran, said more banks are ready to provide letters of credit which he said could save up to 3 percent of the cost of a deal.
“The situation is easing,” he said. “We used to have to wait three to four months to get approval. Nowadays it’s just a phone call and some documents to exchange and that’s it.”