Iranian Parts Makers Asked to Collaborate in Peugeot’s Algeria Venture

Reporting "Asre Khodro" , Parts can be manufactured in Iran and exported to Algeria, or Iranian suppliers can set up production facilities in the North African country,” Yannick Bézard was quoted as saying by Iran Khodro Press.

Iran Khodro and PSA Group’s Peugeot brand signed a €400-million deal in June 2016 creating a 50-50 joint venture they call Iran Khodro Automobiles Peugeot (IKAP).

As per the deal, Peugeot agreed that at least 40% of the parts used in vehicles produced by IKAP would be manufactured in Iran. The French company has also agreed to export 30% of cars and/or auto parts made under the JV through its global sales network.

According to Bézard, Iranian suppliers working with IKAP are capable of producing parts with satisfactory quality. “Therefore, they have been integrated into Peugeot’s global supply chain and will contribute to the production of Peugeot cars in Algeria.”

The Frenchman said participating in Peugeot’s Algeria operations will help Iranian parts makers to find new partners in the global auto market and build trade and economic ties.

The auto parts are to be used at Peugeot’s production plant in the western Algerian city of Oran. The plant is part of a joint venture between Peugeot and three Algerian partners, Condor Electronics, Palpa Pro and Entreprise Nationale de Production de Machines-Outils. The factory will be up and running in 2019 with operations gradually starting this year.

Bézard added, “IKAP suppliers are the crème de la crème of Iranian parts makers. Their merchandise can be sold by Peugeot in different markets.”

Growing Presence

Three Peugeot models namely the super-mini 208, 2008 sports utility vehicle and 301 compact are to be produced by IKAP.

IKAP officially inaugurated production lines of Peugeot 2008 in May. The deputy minister of industries Mohsen Salehinia says that so far 1,000 units of the model have been produced.

Mohammad Reza Motamed IKAP chief said Tuesday that production lines of Peugeot 301 have also been launched. “IKAP is building new factories to increase production capacity.”

In addition to 2008 and 301, three other Peugeot models are produced and sold in Iran,  namely the 405, 206 and 207. In a press release, PSA Group said it sold 444,600 cars in Iran in 2017 under Peugeot license held by IKCO. Iran has 83.4% share of PSA vehicles sold under its name in the Mena region.