French PSA leaves Iranian market due to US sanctions

STR

Hashem Yekkeh-Zareh (2-R), the CEO of industrial group Iran Khodro and The head of French car manufacturing giant Peugeot Citroen PSA group, Carlos Tavares (2-L) visit the Iran-based khodro Industrial Group showroom during a ceremony in Tehran, Iran, 05 October 2016. After lifting some of the international sanctions against Iran PSA reached a deal with Iran's biggest carmaker to open a plant producing 200 thousand vehicles a year.

French PSA leaves Iranian market due to US sanctions


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French auto giant PSA – the makers of Peugeot and Citroen – announced on Monday that it will stop operations in Iran to avoid US sanctions.

PSA had a major stake in the Iranian market through joint ventures with local manufacturers Khodro and Saipa, selling just under 450,000 cars, or approximately 1%, of its global sales. The move indicates that while EU member states are willing to remain committed to the nuclear deal with Iran, the introduction of US sanctions means that Brussels cannot shield EU companies.

PSA has bought the European operations of General Motors in Europe and is currently looking to launch a new car-sharing service in the United States.

Following the merger with GM Europe, PSA has taken over iconic brands, including Germany’s Opel and the UK’s Vauxhall, emerging as the second biggest manufacturer in Europe. While the US is not a major market for PSA, the sanctions could have significant implications by disrupting market access in other services as well as the group’s financial outlook.

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