The Iranian Connection In The GM/Peugeot Alliance

As a member of The Tribe with an Iranian best friend, the general policy on politics pertaining to the Middle East is “don’t talk about it” (although like most young Iranians, my friend’s take on Ahamadinejad would make Rick Santorum look like a capitulating Ayatollah-sympathizer). The same policy seems to have come up in the last week or two, a s talks of a General Motors/PSA tie-up have surfaced. Peugeot has an Iranian best friend, and it may have some interesting implications if the deal goes through.

The Iran Khodro Company is the largest vehicle manufacturer in North Africa, Iran and Central Asia. Although it builds vehicles in partnership with Suzuki, Mercedes-Benz and Renault, it has a long standing relationship with PSA Peugeot-Citroen. The Peugeot 405 based IKCO Samand is known as “Iran’s national car”, and is exported to a number of countries that all regularly vote against Israel at the United Nations; among them, Algeria, Tajikistan, Belarus, Venezuela. Switzerland also apparently gets the Samand, but remains neutral. IKCO also builds Peugeot badged iron like the 206, 405, 407 and a rear-drive Roa, a bizarre mixture of a 405 bodyshell with the rear-drive running gear of the Paykan, aka the Hillman Hunter.

Although we’ve driven the Samand once upon a time, the recent addition of General Motors, a taxpayer funded American company, merited a closer look at the PSA/IKCO alliance. Unlike Renault, PSA doesn’t have a joint-venture agreement with IKCO. Instead, the Peugeot products are built under license, with Peugeot getting a cut for each one sold. There are no real penalties or sanctions barring any American or EU tie-up from happening either (unless it involves Iranian oil). Nonetheless, it’s an interesting element to an already curious deal.