Press TV – October 25, 2013
With European auto sales near a 20-year low, it’s unthinkable that an automaker would willingly cut ties with its largest foreign client. But in February 2012 Peugeot did just that by severing ties with Iran. The move was forced by its new partner, General Motors, which had just been bailed out by the US government.
The decision has cost an estimated €4 billion in lost sales and helped force 8,000 job cuts. In France’s first such industrial closure in two decades, the last car has just rolled off the line at a plant located in a heavily-Muslim suburb of Paris.
Via a partnership with automaker Iran Khodro, in 2011 Iran accounted for 13% of Peugeot’s annual sales. The cars were assembled in Iran, giving domestic autoworkers valuable experience and helping Iran to become one of the world’s top 20 auto-producing countries.
The French press has largely remained silent on the key role Iran sanctions have played in damaging Peugeot, despite pleas from union leaders.
Ironically, giving up the Iranian market seems to have been in vain, as multiple sources have reported that GM has significantly scaled back its alliance with Peugeot. If the sanctions on Iran were designed to inflict the maximum amount of pain on Peugeot, they may have achieved their goal.