Reporting “Asre Khodro” quoted from Bloomberg,The French carmakers sold more cars in the country than European competitors before tension over Iran’s nuclear program forced them to halt exports. Those sanctions will be eased after world powers struck a deal yesterday that called for $۷ billion in temporary relief for the country.
“Peugeot and Renault are potentially the biggest beneficiaries among European carmakers,” said Erich Hauser, a London-based automotive analyst with International Strategy & Investment Group. “But for the car industry to really recover financing for exports needs to be available, so sanctions in banking would have to ease as well.”
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Peugeot and Renault have suffered more than most other European competitors as sales in their home region slide to a two-decade low. Eased sanctions on Iran come at particularly opportune time for Paris-based Peugeot, which vied with Korea’s Kia Motors Corp. (۰۰۰۲۷۰) for the sales lead in the country. Peugeot is seeking to stem cash burn and boost sales outside Europe.
Right Direction
Peugeot, Europe’s second-largest carmaker, sold ۴۵۸,۰۰۰ vehicles in ۲۰۱۱ in Iran prior to the trade sanctions, making the country the automaker’s second-biggest market after France. Chief Financial Officer Jean-Baptiste de Chatillon said last year that the sanctions had cut ۱۰ million euros ($۱۳.۵ million) a month from operating profit.
“Any indication that we could resume doing business with our partners in Iran goes in the right direction,” said Jean-Baptiste Thomas, a Peugeot spokesman. “We’ll see how we can do that the day sanctions are lifted.”
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Peugeot shares rose as much as ۵ percent to ۱۰.۷۴ euros and were up ۳.۷ percent at ۱۱:۰۰ a.m. in Paris. The stock has surged ۹۳ percent this year, valuing the company at ۳.۷۶ billion euros. Renault advanced as much as ۲.۲ percent to ۶۵.۸۲ euros.
Peugeot, which reported a first-half operating loss of ۵۱۰ million euros in its automotive unit, is considering hiring a successor for Chief Executive Officer Philippe Varin, who plans to step down next year, two people familiar with the matter said. The company is talks with China’s Dongfeng Motor Corp. (۴۸۹) about expanding a partnership to boost growth outside Europe.
Stepping Stone
Renault sold more than ۱۰۰,۰۰۰ vehicles in Iran in ۲۰۱۲ and took a first-half charge of ۵۱۲ million euros as a result of its forced withdrawal from the country.
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“This is good news for us as Iran is an important market for Renault,” said Florence de Goldfiem, a Renault spokeswoman. “We’re waiting to see what the conditions of redeployment of our activities in the country may be.”
Lifting sanctions on the auto industry could be worth $۱.۵ billion in revenue for Iran, including precious metals and petrochemical exports, according to U.S. government estimates.
Sales in the country this year are forecast to be more than ۵۰ percent lower than the ۲۰۱۱ peak of ۱.۷ million cars, according to data from IHS Automotive. Before sanctions sapped demand, Kia was the top manufacturer in the country, including the Pride sedan, which was sold under the Saipa brand. Peugeot was second, followed by Iran Khodro Co. and Renault.
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“It’s an interesting market with growth prospects and is potentially a promising stepping stone into the whole region for car manufacturers,” said Peter Fuss, a partner at consultant Ernst & Young in Frankfurt.
Daimler Monitors
The deal struck yesterday with Iran set limits on the country’s nuclear program in exchange for the $۷ billion in relief from sanctions over six months. Kia said it’s waiting for more information from authorities before commenting on the potential impact on its business.
Iran agreed to curtail its nuclear activities and in return won an easing of “certain sanctions” on the autos, oil, gold and precious metals. The deal, which is reversible, releases some of Iran’s oil assets and allows it to keep exporting crude at current levels.
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Daimler AG (DAI), the world’s largest truckmaker, scaled back its business in Iran in ۲۰۱۰ abandoning a ۳۰ percent stake in a diesel-engine venture with Iran Khodro and halting deliveries of three-axle trucks. The Stuttgart, Germany-based automaker closed its office in Tehran in March ۲۰۱۱.
“We’re closely monitoring the current political developments in Iran, but we don’t currently plan to reenter the market,” Daimler spokeswoman Ute Wueest von Vellberg said.
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