PSA Finalizes Joint Venture with Iran Khodro

PSA Group has finalized a new 50:50 joint venture with long-time partner Iran Khodro to produce Peugeot 208, 2008 and 301 cars in Iran.

The new alliance also will enable Iran Khodro to use the platform that carries those Peugeot models to develop its own cars.

The partners plan to invest as much as €400 million over the next five years to upgrade their 50-year-old manufacturing facility outside Tehran and to bolster their local product development capabilities. Vehicle production is expected to begin in the second half of 2017.

PSA has collaborated with Iran Khodro for years. It pulled out of the Iranian market in 2012 when international sanctions were imposed on the country. Iran Khodro continued to assemble previous-generation Peugeot cars. PSA predicts the Iranian car market will quickly return to its 2011 peak of 1.6 million vehicles and could reach 2 million units by 2022.