Iranian, French Automakers Renewing Previous Contracts: Minister

Speaking on the sidelines of a forum on Iran-France economic relations here in Tehran on Tuesday, Mohammad Reza Nematzadeh said, “Iran and France are trying to renew their previous contracts in a bid to materialize their cooperation in the automobile sphere.”

The Iranian minister, however, noted that the French automaker, Peugeot, has to make reparation for the lack of commitment to the contracts it had signed with Iran in the past.

Nematzadeh also made it clear that both Tehran and Paris should apply certain criteria in the new contracts to prevent some recurring problems, and added, “One of Iran’s basic priorities in signing new contracts would be the inclusion of the share of exports.”

Earlier on Monday, a delegation of more than 100 French companies arrived in Tehran, in the biggest demonstration of western business interest in Iran following an easing of sanctions on the country.

The French business delegation, mainly from the European country’s car making, mining, industrial and commercial sectors, had also a meeting at Iran Chamber of Commerce, Industries, Mines and Agriculture earlier in the day.

France and the other countries are preparing to seize opportunities in the Iranian market following the easing of sanctions on Tehran after a nuclear deal between the Islamic Republic and the six major world powers took effect on January 20.

This comes after the European Union (EU) sanctions forced the French auto-giant Peugeot -- known fully as PSA Peugeot Citroen – to suspend its business in Iran in February 2012, which caused a sudden shrink in a large part of the group's market.

In 2011, the carmaker had sold 457,900 CKD (spare part) units in Iran. The halt of its exports of vehicles to Iran due to international sanctions accounted for around 13 percent of the firm’s global deliveries in 2011.

PSA lost more than 90 percent of the value of its share prices in 2007 and ever since the group has been struggling.