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.