Reporting "Asre Khodro", Under the 50-50 joint venture, they will produce Peugeot 2008 crossover, 208 supermini and 301 compact cars in Iran, the Tasnim news agency quoted an unnamed auto industry official as saying Sunday.

Iran Khodro and Peugeot will add two other models to their production line later, with 50% of production to be done in Iran, the official added.

Iran was Peugeot’s second largest market before the French automaker left the country in breach of contract, idling a massive assembly line which manufactured vehicles from kits of parts.

The French manufacturer faces a backlash from its abrupt pullout from Iran in 2012.

Last November, Iran Khodro Managing Director Hashem Yekke-Zare said Peugeot had submitted to all conditions demanded by his company for cooperation.

“Setting up a 50-50 joint venture, turning Iran to the regional center of Peugeot exports and transferring technology as well as investment were Iran’s conditions for cooperation which the company has accepted,” he said then.

The company reportedly plans to sell 400,000 cars in Iran a year. Before slamming the door in Iran Khodro’s face in 2012, the two partners sold 473,000 units.

Peugeot quit Iran under political pressure following a partnership agreement with General Motors which the US company terminated later.

Iran is the Middle East’s largest car market and car making is the country’s biggest industry after oil. According to IHS Automotive estimates, Iran’s auto market is on course to average 1.7 million units in annual sales.

Western and Asian manufacturers from Germany, Italy, Japan and South Korea are exploring a return and the race is already getting tight for a share of the upside.