Peugeot Citroën will pay over $446m in compensation Iran Khodro for losses incurred after the French automaker’s departure from the country following sanctions.
The largest-selling European carmaker in pre-sanctions Iran, Peugeot suspended its sales in Iran (10% of its global total) in 2012, when the sanctions against Iran were extended to the automobile sector.
Since the lifting of the sanction by the P5+1, Peugeot and IKCO have signed a joint-venture deal to produce latest-generation vehicles in Iran.
“Based on the deductions [$446m] of compensation will be paid by Peugeot to Iran Khodro because of the losses,” Hashem Yekke-Zare, MD of Iran-Khodro Company told Iranian news agency ISNA.
Peugeot has declined to comment on details of the deal, but told Reuters that “the deal signed with Iran is a good and balanced one”.
Yekke-Zare said the compensation would largely take the form of services and discounts, including auto parts for current models being produced in Iran and devices for Peugeot 207 models.
He detailed that Peugeot has already written off $12.3m of debt held by Iran Khodro and $72.7m in royalties owed by the Iranian company from vehicle sales between 2012 and 2016, while $355m will be delivered in the form of future co-operation, including training.
The relationship between the pair of companies dates back more than 50 years, and today, four million Peugeot cars navigate the roads in Iran.
