Iran Khodro announced it will begin the production of Peugeot 307 to replace the 25-year-old Peugeot 405.
The top car manufacturing company added that it has agreed with Peugeot to start production before the end of the Iranian year (March 19, 2016), according to the Persian website Asre Khodro.
This does not contradict an earlier IKCO announcement that production of the vehicle will begin after the official lifting of sanctions by January.
The 307 has been touted as the ideal model to replace the aging 405 sedan, as it offers many modern features like ABS brakes and front and rear airbags.
The Peugeot 307 was originally presented at the Paris Motor Show in the year 2000, as the 307 Prométhée prototype.
The model was earmarked as the successor of the older and larger 306 hatchback model. Since its release in 2001, the car has been sold in several markets, including Australia, South America and China. The Chinese variant of the vehicle was produced up until a few months ago.
Its height is 1,510 mm (59.4 in), which is in the middle of the spectrum between small family cars (between 1400 and 1450 mm) and compact MPVs (between 1600 and 1650 mm). Some consider the 307 as a low compact MPV rather than a small family car, because of its height and profile.
The car has been released in several formats, including hatchback, sedan, cabriolet and station wagon.
The 307 sedan variant was particularly popular with Chinese car buyers who prefer its larger trunk space. In the United Kingdom, Peugeot sold most of its soft top versions as well as station wagons.
According to some sources, the 307 suffers from below average build quality and reliability, having featured at the bottom of the German Automobile Club breakdown statistics for three- to five-year-old small family cars in 2009.
However in 2005, the car was given a facelift and its reliability increased, making it a more popular model. Its 2006-7 models were referenced as a lot more reliable and trustworthy.
China Connection
The variant likely entering the local market is the sedan version formally produced in the joint DongFeng Peugeot Factory. Iranian car buyers are particularly fond of this shape. It is also likely that Iran Khodro has struck a deal with Peugeot-Dongfeng to ship the assembly machinery of the vehicle to Iran.
However, critics of Peugeot and Iran Khodro are likely to see this deal as reflecting Peugeot's bad intentions toward Iranian consumers. The model is now 14 years old.
Prior to this announcement, Peugeot stated that it would no longer sell its older vehicles in the local market and said publicly that it would only offer newer products.
In comparison, Peugeot's other mass-produced local vehicle, the 206 model, was released in Europe in 1998-9 just two years ahead of the 307.
Peugeot's latest iteration of the 30X series is the 308 model originally released in its first style in 2007. Since then Peugeot had announced that they no longer planned to use that number scheme and the Peugeot 309 would instead be titled Peugeot 308 Type 2.
The French company has also kept quiet on whether it would bring other vehicles to the local market. The micro-car segment, which is currently swamped by the 1980s Kia Pride, is ripe for fresh competition.
Peugeot's B-Zero platform, developed in cooperation with partner companies Nissan and Citroen, is also an ideal vehicle for the lower end automotive market. The Peugeot 107, Citroen C1 and Nissan Aygo, built on the same platform, are ideally situated for the local market. Priced at around $7,000, a local cut-down variant could work well as a low-cost alternative.
IKCO has not mentioned whether these vehicles will ultimately join their older sibling at a later date or whether Peugeot plans to add elements from the newer model into the local variant.
French Competition
Peugeot's main French competitor, Renault, has announced it too is working to produce a selection of new vehicles for the local market.
In a recent press conference held in the Iranian capital Tehran, Peyman Kargar, the group's area manager, said Renault sees Iran as a strategic business partner.
The director added that his company is about to launch two new vehicles soon: Logan (L90) pickup and Sandero.
The pickup entered the local market last month, whereas Sandero will be unveiled late August and presales will begin then.
In addition, Renault has also decided to produce the hugely popular Dacia Duster inside Iran.
Kargar noted that Iran is currently Renault's industrial base in the Middle East and the company wishes to source the expanding Middle Eastern market via Iran.
