Iranian automotive industry and its partners hit by US sanctions

The return of the US sanctions against the Iranian automotive industry, has not only affected the domestic manufacturers, but also the foreign partners.

Soon after the nuclear deal was reached between Iran and the other six countries in June 2015, the two French automakers, Peugeot-Citroen and Renault, resumed their activities in Iran.

Their return to the Iranian market influenced their production positively, boosting their sales. However, with the return of the US sanctions, Renault announced that it will stop production in Iran soon. In August 2018, Renault halved its production in Iran and as a consequence its sales in the third quarter of the year dropped by 6 percent.

Overall, Renault reports show that its sales have decreased 13% over the first nine months of 2018.

Peugeot-Citroen, the giant automaker which owned more than 25% of Iran’s automobile market, decided to leave. Donyaye Eghtesad writes that the French manufacturers shows 90 percent drop in its sales in MENA region. Compared to 131,000 cars sold in the first nine months of 2017, this year Peugeot-Citroen has sold only 12,700 automobiles in the region. In general, the company shows 48% decrease in sales for the current year.

The numbers show how much Iranian market could have been important for those European companies which had little sales in the US. However, fearing the US sanctions, they seem reluctant to continue their activities.

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