The Truth About Cars » Iran Khodro The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Jul 2014 17:47:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Iran Khodro Renault Resumes Supply Shipments To Iranian Production Lines Thu, 30 Jan 2014 17:30:16 +0000 Iran Khodro Renault Production Line

After a six-month self-imposed hiatus, Renault has begun shipping “a very low volume” of parts overland to Iran for vehicle assembly.

According to Automotive News, over the past 10 days, parts for the Renault Tondar — the variant of the Dacia Logan built and sold by Iran Khodro — have made their way to Iranian production lines overland from Romania upon temporary easing of sanctions against the Iranian government for their nuclear ambitions. The lifting of sanctions is currently expected to last six months after Tehran pledged to freeze key components of their nuclear program, with talks due next month to work out a permanent deal to wind down sanctions in exchange for curbs in Iran’s aforementioned program.

For Renault and their rivals in Peugeot/PSA, the six-month window is crucial in rebuilding their relationships with their partners in Iran Khodro and Pars Khodro, as well as regaining their foothold on the Persian auto market before more players — such as General Motors — enter the room.

According to Renault’s Asia-Pacific boss Giles Normand, the window marks an opportunity to “gradually restart the supply of parts for vehicle production as well as flow of payments,” noting that the current state of things “must be allowed to improve visibly in Iran” lest their customers feel their country has been short-changed through a lack of visible change.

Total production of vehicles in Iran peaked at 1.6 million units in 2011, the year the sanctions were imposed. Renault lost 64,500 deliveries as a result in 2013, marginally dampening global growth to 2.63 million units overall. With the possibility of 1 million to 1.5 million annual sales at stake, Renault nor PSA can afford another setback.

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Iran Khodro Looking To Build Cars In Iraq Tue, 28 May 2013 15:47:23 +0000 IKCO Samand. Photo courtesy Athos Nobile.

While Russia, Indonesia, Brazil and even Burma get the majority of the car industry’s attention when it comes to emerging markets, Iraq is also considered to be an up-and-coming place to sell cars. Iraqis have a funny habit of enjoying cars that are linked to foreign armies; American cars are fairly popular in the country, and so are Iranian machines too.

Iraqis may have differing opinions on America, but Iran and Iraq fought a bitter, decades-long war that has had a profound effect on the country’s identity. In many ways, the enmity between the two sides is still present, but that hasn’t stopped IKCO, Iran’s national car maker, from capturing significant market share in the country – and not just among their coreligionist Shias either.

The next step for IKCO is a car factory in Iraq. Just-Auto reports that a factorywhich we reported would be coming online last year – will finally be up and running, producing as many as 30,000 Samands (based on the old Peugeot 405) annually. That could theoretically give IKCO a quarter of Iraq’s car market if the Samands ended up being sold entirely in Iraq. Given the sanctions against Iranian goods in the global marketplace, it’s possible.

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Customs Data: More Than Half Of Iran’s Car Parts Still Coming Through Wed, 20 Jun 2012 12:45:59 +0000 Further on yesterday’s story on PSA’s, and by extension GM’s, alleged continuous supply of embargoed car parts to Iran, Bloomberg reports that Iran’s imports of automobile parts decreased by 47.8 percent to $254 million in the two months since March 20.

In other words, more than half of the previous amounts still come through. From March 20 to May 20, Iran imported more than 21,100 tons of car parts, says Bloomberg, citing Iranian newspaper reports based on customs data.


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Media Reports: Peugeot Violates Iran Sanctions. UANI: Investigate GM! Tue, 19 Jun 2012 16:43:49 +0000

GM-partner PSA has repeatedly stated that shipments of parts to Iran’s carmaker IKCO (a.k.a. Iran Khodro) had stopped in February, and would not resume until September, if at all. The parts are for the 206 and 405 models, and PSA said it stopped shipping them in response to sanctions on Iran. IKCO says it’s not true at all, ships are unloading parts and the lines are running.

A report of just-auto says there are “deeply conflicting views as to whether or not PSA Peugeot Citroen has halted shipments.”

In a call to Teheran, just-auto was told that “there is not any problem in shipments of Peugeot product parts – shipments of Peugeot are continuing here.”

In a call to PSA HQ in Paris, just-auto was given a totally different story: “We have nothing to add to what we have already said – that is shipments are suspended – there is nothing more to say,” a PSA spokesman said.

Meanwhile in the U.S., lobby group United Against Nuclear Iran (UANI), reports that “IKCO has not yet received any official announcement from Peugeot indicating a halt in their mutual cooperation.” A week ago,Mark D. Wallace, former U.S. Ambassador to the U.N. and CEO of UANI said in an op-ed piece that statements to the effect that Peugeot had stopped shipments of parts to Iran “simply do not jibe with reality,” and that “it is hard not to feel like GM and Peugeot are simply trying to make this controversy go away without making the responsible decision to truly end their business in Iran.”

Wallace and UANI called on Senator Carl Levin, chairman of the Armed Services Committee, to hold GM accountable for whom it partners with. Wallace wrote:

“In light of the taxpayer-funded $50 billion bailout of GM and the U.S. Treasury Department’s current 32 percent stake in GM, it is completely unacceptable for GM to be financially aligned with a company that is doing work with a regime responsible for the deaths of U.S. servicemen. The GM-Peugeot partnership seems to run afoul of U.S. sanctions, and it should be investigated.”

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Sanctions Cause PSA To Suspend Iran Khodro Shipments Thu, 03 May 2012 12:50:31 +0000

Sanctions imposed on Iran by the EU and the United States have compelled PSA to delay parts shipments to Iran Khodro until September at the earliest.

Iran Khodro needs parts to build cars like the 206 and the ancient (by modern standards) 405. The delays are expected to cost both parties about $10 million per month.

Speaking to Just-Auto, a PSA spokesperson said

“We have withheld shipments to Iran until July…It is for financing reasons because of the sanctions. I guess in May or June it will be reviewed. Most factories are closed in France in August, so if you start again it will be in September.”

Some have suggested that General Motors, which has entered into an alliance with PSA, has put pressure on the French firm to suspend or end its ties with the Iran Khodro, but GM steadfastly denies this.

Just-Auto also spoke to an Iran Khodro spokesman who was optimistic that the company could find replacement parts, and expressed hope that negotiations regarding Iran’s controversial nuclear program would go well, leading to a resumption of business as usual. PSA’s Iranian business interests are worth $1.57 billion, or 1.5 percent of PSA’s total revenue.

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Iran Khodro Plans Euro IV-Compliant Engine Family Despite Looming Sanctions Tue, 10 Apr 2012 15:53:12 +0000

Even as the EU sanctions continue to add up, Iran’s national car maker is going in the opposite direction. Iran Khodro is set to launch a new engine family that will comply with the latest Euro-IV emissions regulations for use in their Peugeot-based models.

The new motors, dubbed the XUM series, can run on gasoline or natural gas, and will be installed in the IKCO Samand and the Iranian-built Peugeot 405.  The XUM engine is scheduled to go into mass production in June, but Peugeot parent company PSA has recently suspended parts shipments to IKCO, impeding production of vehicles like the 405. While Iranian business only accounts for 1.5 percent of PSA’s annual revenue, IKCO is highly dependent on Peugeot. The Samand is only sold in Belarus, Russia and Switzerland, which are non-EU countries. IKCO may be taking its environmental lead from the EU, but their wares aren’t going to be sold there anytime soon – or anywhere, if the sanctions are successful.

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The Iranian Connection In The GM/Peugeot Alliance Tue, 28 Feb 2012 21:19:57 +0000

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, as 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.


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Peugeot and Iran. They’re Staying Together Mon, 18 Oct 2010 17:46:43 +0000

Whilst doing my usual scan of today’s news I saw an article which made me do a double take. And I mean a proper “Whaaaaaaaaat?!” I saw a couple of interesting things in it, I couldn’t believe my eyes. Then I saw who published it. The Tehran Times. So, treat this story with a pinch of salt.

A few weeks ago, I wrote about how the Iranian government was threatening to put the thumbscrews on Peugeot’s Iranian subsidiary. Possibly in an attempt to show the world how these global sanctions mean very little to them. Well, according to The Tehran Times, the Iranian government has nothing but a good friend in Peugeot.

They report that Jean-Marc Gales, an executive vice president and member of the managing board with PSA Peugeot-Citroen, has given Iran his vote of confidence. “We will proudly continue as before to do business with our Iranian partner,” he said (or “claimed” as the Tehran Times writes). First surprising thing: The French sticking two fingers up at global sanctions. That’s some ballsy stuff to say! (But then: Who was in Iraq before America moved in?)

The article then claims the second surprising element. That Iran represents 20 percent of Peugeot’s global sales. 20 percent?! That’s a lot.

Mr Gales then went on to discuss the need to increase exports of cars through Iran using the recent credit crisis as justification. “The crisis mostly troubled the U.S and Europe. Countries like Iran had no problem in this regard.” he said, “For this reason, Iran’s potential in the global market is significant and we would be content to expand our global market in the framework of enhancing our partnership.”

My first thought to all of this was that the Tehran Times wrote this story, hoping that it’ll give bad press to PSA around the world. Thereby, tightening the thumbscrews on PSA even further. But if it is all within context and accurate, I think it’s fair to say that I wouldn’t expect Peugeot (or Citroen) in America any time soon. I doubt they’ll be welcome there.

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Iran Threatens To Bankrupt Peugeot Mon, 11 Oct 2010 20:41:43 +0000

With sanctions piling up against Iran because of their nuclear ambitions, Iran is getting more and more isolated on the world stage. They need to assert their authority and let the world know they won’t be pushed around. And they may have found a way of doing it according to the Iranian Student’s News Agency (ISNA).

Autoevolution reports that the ISNA has put forward a story that’s quite bizarre. They claim that Peugeot’s Iranian subsidiary has received a few bankruptcy related threats from the Iranian government. The Iranians are threatening to stop the import of spare parts for cars. If that were to happen Peugeot Iran would have to declare bankruptcy, the Iranian government claimed. “If we decide, we can bring Peugeot company to bankruptcy. If we stop the importation of spare parts from Peugeot tomorrow, the company’s sales will drop by 2.5 billion dollars,” said Mohammad Reza Rahimi, Iran’s Vice President, “If we just raise our eyebrows, a part of the French auto industry will collapse”. Peugeot produces the 405 and 206 models in a joint venture with Iran Khodro.

Iran doesn’t report production data to OICA, but production by Iran Khodro is estimated at 600,000 units. Iran Khodro also has a joint venture with Renault and Mercedes. Curiously, these two companies remained unmentioned.  If the Iran would stop importing parts, it would hurt Peugeot, but won’t bring it down. Iran also imports large amounts of parts from China. Even with China, there are problems. The world trades in U.S. dollars, and Iran increasingly has problems getting dollars and getting them out of the country – or so they say. Having no parts also has a small, but inconvenient side-effect: The car won’t drive.  A small part of the French auto industry may collapse, along with a large part of the Iranian traffic.

This may needs a little more thought, Mr Rahimi. Until then, I’ll file this story until “WTF”, ok…?

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