US Sanctions Against Iran Hurting Renault, Peugeot
EghtesadOnline: French automotive companies PSA Group and Renault have linked declines in their first-quarter revenues to their forced withdrawal from Iran under threat of US sanctions.
Data from Iran’s Ministry of Industries indicates a sharp fall in production of French-derived cars in Iran. In the past Iranian fiscal that ended in March, 328,152 French-derived cars were made, almost half compared to 604,526 units made in the previous year.
Peugeot maker PSA Group reported a 1.1% decline in its first-quarter revenue falling to €18 billion, mainly caused by dropping sales outside Europe. In a press release linking the fall to its Iran withdrawal, PSA says its global sales volumes fell 15.7% to 886,400 vehicles in the quarter “in particular due to the suspension of the group’s activities in Iran.”
Excluding Iran, deliveries fell 6.1%, weighed down by a 30% decline in Latin America. PSA’s revenue dropped to €17.98 billion in the January-March quarter from €18.2 billion a year earlier, Financial Tribune reported.
Renault’s revenue fell to €12.527 billion for January-March as deliveries declined by 5.6% to 908,348 vehicles, hit by its withdrawal from Iran last year.
Last year’s pullout from the country under threat of US sanctions resulted in a 31% decline for Renault’s Africa, Middle East, and India sales region, the carmaker said. Excluding Iran, global deliveries would have fallen a more modest 1.7%.
In a press release Renault points out that in Iran, the application of US sanctions led to the cessation of sales for the group since August 2018.
Data released by the Industries Ministry in Tehran shows that the number of cars made locally through collaboration between Iranian carmakers and their French partners declined 45.7% during the past fiscal.
The main car companies, Iran Khodro and SAIPA, both have ties to Renault. IKCO manufactures Renault Logan, known as Tondar 90 in the local market. SAIPA in addition to the Logan manufactures the Sandero and Sandero Stepway.
IKCO has an agreement with PSA Group’s Peugeot and produces the Peugeot 405, 206 and 2008.
Prior to the new US sanctions SAIPA used to work with PSA Citroen and was slated to produce Citroen C3 in the central city of Kashan.
In the March 2018-19 fiscal, local firms made 328,152 vehicles in collaboration with their French partners, significantly lower than the 604,526 units a year earlier.
SAIPA-Citroen collaboration ended in late 2018. Data shows that 2,000 units of the C3 were made in Iran. However, Citroen production in Iran stopped after the new round of United States’ restrictions.
In the past Iranian year, 274,997 cars bearing the Peugeot badge were made in Iran, down 38.5% from the 447,783 units a year ago.
Renault’s operations in Iran have been hit harder compared to Peugeot. In the 2018-19 fiscal, Renault production in Iran fell to one-third of the 156,743 units made a year earlier.