By on February 28, 2012

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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15 Comments on “The Iranian Connection In The GM/Peugeot Alliance...”

  • avatar

    “Nonetheless, it’s an interesting element to an already curious deal.”

    Actually, there’s nothing to see here. Nothing at all interesting.

  • avatar
    Da Coyote

    Danger, Peugeot, danger, danger….

    GM’s management has an unbroken record of incomptency and engineering ignorance.

    Of course, Peugeot does also, so perhaps it’s a good match.

    Now, when one adds the Iranians…who knows?

  • avatar

    Here is another reason why I won’t buy GM products.

  • avatar

    After seeing Kim Jong Il go to his final resting place in a Lincoln, nothing would surprise me.

    • 0 avatar

      As bad as Iran’s government is, it is nowhere near as bad as North Korea. Our buddies the Saudis are much worse than Iran in every way. Not to mention that it was Saudi citizens, not Iranian citizens, that perpetrated and funded 9/11. An Iranian director won this year’s Academy Award for best foreign film. I don’t see that happening for any North Korean films. Kim Jong Il did make an appearance at the Academy Awards, on another short person with a Napoleonic complex, but he did not win anything.

      • 0 avatar

        Saudi citizens, along with a lot of other nationals, help fund Al Qaeda, not the Saudi government.

        Meanwhile the Iranian government funds and arms those who kill US soldiers in Iraq and Afghanistan. And has been for years.

        But it’s certainly cool that their film industry garnered an Academy Award

        Sorry, but the Iranian government is a lot worse than the Saudi government, despite the Saudi lack of any Oscars.

      • 0 avatar

        Timothy McVeigh committed the worst terrorist attack on American soil before 9/11. He was a US citizen. We don’t blame the US gov’t for the actions of one citizen, just like we don’t blame the Saudi gov’t for the actions of some of their citizens. You also don’t know what goes on behind the scenes with intel now with Saudi Arabia.

        Iran on the other hand funds people fighting the US. I wouldn’t classify their gov’t as better than Saudi Arabia.

  • avatar

    Despite the fact that they have to hate eachother for political reasons, Santorum and Ahamadinejad would get along quite well in person. “No gays in Iran? That’s amazing Ahamadinejad, how do you do it?”

  • avatar

    Well, GM won’t have to worry about the Iranian issue too much longer. Unless they try to sell the burned out radioactive husks of cars.

  • avatar

    I remember some European companies were miffed about 10 years ago by the US passing enforcable legislation (IDR details), which somehow curtailed the US business opportunities of any of those companies if they were owned, more than a certain %-age (IDRC, but max was on the order of 5%), by Iranian interests.

    I know of at least one german conglomerate which had to (IIRC) repurchase a large portion of its stock from one of its iranian government owners (which had originally inherited the stock from the Shah).

    IDK if the above-mentioned law is still on the books, or enforced, but this recollection makes me wonder: if the current US policy is directed toward throttling Iran’s nuke ambitions by throttling its economy, then perhaps a GM buy-into PSA might be either: 1) a back-door way to get agents into the country (under the guise of being PSA personnel), or 2) a way to exert influence on PSA, and its supply-base, to stop supplying Kohdro with what it needs to build complete cars.

    Stop the flow of components into the factories, and the cars can’t be exported, and a vital source of employment and income in-flow via the aforementioned A,T,B,V countries will dry-up. (I’ve never seen one of these vehicles here in Switzerland, and my bet is that if they are older technology, then there is probably an insignificant about of income coming from swiss sources.

    Even though the Kohdro volumes are likely puny in comparison to the rest of PSA’s global volume, a small probability exists that PSA is under such pressure that it can’t forsake any income derived from Kohdro (or any other place where they are trying to grow their business, i.e. China), and/or couldn’t bear to agree any request from shared-suppliers for price increases due to those supplier’s losses of Kohdro, or chinese, volumes. Thus, an arrangement with GM, which might provide some flexibility or synergy might be one way to overcome the scenario of cutting-off Kohdro, or the chinese, without further weakening PSA.

    Again, separating possibility and probability, is important here, as I’m only speaking of possibility … but in the shadow of possibility lies probability, and within that, there is a sub-shadow where this match-up may or may not be something arranged between the US and French governments…

    p.s. It also occurs, that there is a similar scenario, where it is not about cutting-off, but about being cut-off, wherein if the French government supports the UN, or the US, in any economic or military action against the State of Iran, that PSA could be directly injured by iranian (or chinese) retaliation, and so coming up with an alliance arrangement between GM and PSA, to save PSA from this may be a prerequisite for Mr. Sarkozy to provide full-on support against Iran. Again, the same “arranged-marriage” sub-shadow of possibility cited above would apply.

    Hope this kind of makes sense … I’ve edited it a few times now, and see that it still isn’t very concise, but I also realize that I must be too tired to make it completely clear. So I’m going to bed!!

    • 0 avatar
      Athos Nobile

      I think the law you mentioned is still in the books.

      IIRC the cars that are made in Iran have around 80%+ of local content. I don’t know how much would be the amount of PSA-France componentry involved.

      I was wondering about the Iranian connection since I saw here the first headlines about this last week.

  • avatar

    The Paykan used a Peugeot engine for its last few years so the power train was well proved

  • avatar

    This deal could go nuclear.

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