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PSA Peugeot Citroen, Renault ready to return to Iran market

Press TV – November 30, 2013

French automakers PSA Peugeot Citroen and Renault are planning to return to Iran’s market following a recent nuclear deal reached between Tehran and six major world powers in Geneva which will ease sanctions on auto industry.

According to the Geneva deal, the EU and US sanctions on Iran’s petrochemical export, gold and precious metals and auto industry as well as the supply of spare parts for the Iranian airplanes would be suspended.

French auto giants are poised to resume vehicle sales in Iran to reclaim their share of the huge Iranian market they lost after the implementation of sanctions against Tehran over its nuclear energy program in 2011.

Peugeot and Renault are among Western companies sending representatives to a crucial auto conference that was to open in the Iranian capital, Tehran, on Saturday.

Their participation in the conference has been interpreted by the media as a sign to mark their early return to the Iranian market before other competitors.

Renault and Peugeot have been production partners of Iran’s domestic majors – Iran Khodro and SAIPA.

Official data show the sanctions against Iran led to the unemployment of 100,000 workers and undermined the output of the two French giants.

A day after the nuclear deal between Iran and the six countries, Peugeot’s shares soared 4.50 percent to 10.69 euros and Renault rose 1.43 percent to 65.35 euros.

Iran used to be Peugeot’s second-biggest market in car sales volumes before Western sanctions against Tehran were toughened. In 2011, Iran accounted for 13 percent of Peugeot’s annual sales.

Peugeot has experienced an estimated four billion euros in lost sales after cutting ties with Iranian automaker Iran Khodro in February 2012 under pressure from its American partner company General Motors.

On July 26, Renault reported a huge fall in profits for the first half of 2013 after writing off the entire value of its business in Iran due to the US-led sanctions against Tehran.

The firm took a 512-million-euro (680-million-dollar) charge after halting its activities in Iran.

Last year, Renault sold a total of 100,783 vehicles in Iran, and had a 10-percent market share. The Middle Eastern country was Renault’s eighth-biggest global market by sales, above Italy where Renault sold 96,144 units and Spain where it sold 83,366 cars.

On November 24, Iran and the five permanent members of the United Nations Security Council – Russia, China, France, Britain and the US – plus Germany sealed an interim deal in the Swiss city of Geneva to lay the groundwork for the full resolution of the West’s decade-old dispute with Iran over its nuclear energy program.

November 30, 2013 Posted by | Economics, Wars for Israel | , , , , , , | Leave a comment

Iran sanctions force historic plant closure for Peugeot

Press TV – October 25, 2013

With European auto sales near a 20-year low, it’s unthinkable that an automaker would willingly cut ties with its largest foreign client. But in February 2012 Peugeot did just that by severing ties with Iran. The move was forced by its new partner, General Motors, which had just been bailed out by the US government.

The decision has cost an estimated €4 billion in lost sales and helped force 8,000 job cuts. In France’s first such industrial closure in two decades, the last car has just rolled off the line at a plant located in a heavily-Muslim suburb of Paris.

Via a partnership with automaker Iran Khodro, in 2011 Iran accounted for 13% of Peugeot’s annual sales. The cars were assembled in Iran, giving domestic autoworkers valuable experience and helping Iran to become one of the world’s top 20 auto-producing countries.

The French press has largely remained silent on the key role Iran sanctions have played in damaging Peugeot, despite pleas from union leaders.

Ironically, giving up the Iranian market seems to have been in vain, as multiple sources have reported that GM has significantly scaled back its alliance with Peugeot. If the sanctions on Iran were designed to inflict the maximum amount of pain on Peugeot, they may have achieved their goal.

October 26, 2013 Posted by | Economics, Wars for Israel | , , , , , , | Leave a comment

Unemployed autoworkers real losers in Peugeot-Iran row: Analyst

Press TV – July 27, 2012

France’s largest car maker PSA Peugeot Citroen made a “disastrous” choice to sever ties with Iran, given Europe’s economic crisis and failing car markets, an expert says.

In February, the automaker decided to end relations with the Islamic Republic, losing the half-million vehicle sales Iran would have provided in 2012.

“Such a move, amid the European sovereign debt crisis and plummeting auto sales across the continent, seems like it could only be a disastrous business decision. And it is,” Ramin Mazaheri wrote in an article published on Press TV website.

Unable to replace the lucrative market, Peugeot was later forced to jettison 8,000 jobs to compensate for billions of euros it lost as a result, he noted.

Mazaheri dismissed the “strengthening of sanctions” against Iran and banking difficulties as the reasons behind the company’s decision.

“In exchange for selling seven percent of the company’s shares to General Motors, owned by the American government, the US insisted that Peugeot should stop selling cars to Iran,” he explained.

The analyst further referred to Iran’s policy of “economic protectionism,” which has helped the country to produce more cars than Italy or the UK and become the world’s 12th largest auto manufacturer.

Peugeot’s pullout will not affect the Iranian car industry as Iran will now continue to partner with other auto companies and to “improve the quality of Iranian vehicles by importing car kits to be assembled in Iranian factories,” according to Mazaheri.

“The 8,000 now-unemployed auto workers, as well as those who worked at the thousands of secondary jobs associated with the Peugeot plants” are the real victims of the company’s decision, he concluded.

July 27, 2012 Posted by | Economics, Wars for Israel | , , , , , | 1 Comment

Iran Khodro says coping with Peugeot exit

Tehran Times | July 25, 2012

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,” Hossein Najari, Deputy CEO for production 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.

PSA Peugeot Citroen on Wednesday announced it will seek to cut 1.5 billion euros ($1.8 billion dollars) in costs over the next three years after declaring a 819-million-euro ($989-million) loss for the first half of 2012.

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.

The maker of two-thirds of France’s cars is in a tailspin as a deepening recession in many markets in Europe takes its toll on its business — Europe is Peugeot’s main market. The company’s share price has more than halved since March.

The first-half loss contrasts starkly with a profit of €805 million in the same period last year and came on the back of a 5.1 percent fall in revenue to €29.6 billion.

The company doesn’t expect Europe to pick up anytime soon, saying Wednesday that it expects its European market to contract by 8 percent this year.

In response, Peugeot announced earlier this month that it would close a major factory in France and cut 8,000 jobs — part of a plan to save €2.5 billion by 2015. Those savings will also come from efficiencies gained by an alliance with General Motors. About half — €1 billion — of those savings will come this year alone.

“The group is facing a difficult time,” Chairman Philippe Varin said. “The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganization of our French production and a reduction in our structural costs.”

But the company’s cost-cutting plans have run afoul of President Francois Hollande’s Socialist administration, which has said the restructuring is unacceptable and that it will force Peugeot to save some of the jobs it wants to eliminate.

On Wednesday, the government will unveil a plan to support the auto industry — part of its carrot-and-stick strategy with Peugeot. It’s expected to give incentives to French consumers to buy French cars and to support the clean-energy vehicles that the company excels at.

But much of Peugeot’s problems stem from an over-supplied European car market, and it’s unclear how much the government can do for the company. France’s car industry was already given a bailout under former President Nicolas Sarkozy.

(Source: agencies)

July 25, 2012 Posted by | Economics, Wars for Israel | , , , , , | Comments Off on Iran Khodro says coping with Peugeot exit

Sanctions on Iran force French auto job losses

Iran market cannot easily be replaced for Peugeot: French union member
Press TV – July 18, 2012

A French auto workers’ union member says the country’s largest automaker Peugeot cannot find a replacement for the Iranian market after the company was forced to slash 8,000 jobs over Iran sanctions, Press TV reports.

“We have no sales not for economic reasons but for political reasons. The Iranian market is one that cannot easily be replaced for Peugeot. It’s an unacceptable decision for us,” Jean-Pierre Mercier from a closed Peugeot plant told Press TV.

Peugeot’s announcement on Thursday that PSA Peugeot Citroen would axe 8,000 jobs and shut the first car factory in 20 years has caused a political firestorm.

“If the state can prevent Peugeot from selling cars to Iran, why cannot they prevent these firings? Unfortunately, the unions insufficiently mobilized to tip the scale and stopped the embargo,” Mercier said.

Iran is Peugeot’s largest foreign customer, with half a million in auto sales translating into some several billion Euros each year. However, citing new banking sanctions, Peugeot ended cooperation in February.

Peugeot’s auto sales this year are down nearly a quarter of a million units, almost exactly the amount that Iran would have normally purchased.

According to reports, giving up the Iranian market might have been the price of Peugeot’s recent alliance with Detroit’s General Motors, owned by the US government, which has imposed sanctions on Iran for decades.

This is while Renault, another major French automaker, saw their Iranian sales double last year to 100,000 vehicles and they expect this number to rise.

July 18, 2012 Posted by | Economics, Wars for Israel | , , , , | 2 Comments