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French, Iranian Carmakers Sign Joint Venture Deal


French carmaker Peugeot-Citroen (PSA) and Iran Khodro have signed a final joint-venture agreement in Tehran to produce vehicles in Iran.

The 50-50 venture is expected to invest 400 million euros ($450 million) over the next five years, PSA said in a June 21 statement.

It will manufacture the Peugeot 208, the 2008 sport utility vehicle, and 301 compact using parts mostly made in Iran.

The first cars produced under the new venture are set to roll off the production line at a Tehran plant in the second half of 2017.

The Islamic republic is emerging from international isolation after the easing of sanctions in January under a deal between Tehran and global powers to curb Iran's nuclear program.

PSA pulled out of Iran -- its second-largest market -- in 2012 when the toughest sanctions were imposed.

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