After the US re-sanctioned Iran in the summer of last year, which also hurt the country’s car industry, operations of French auto companies, Renault and Peugeot, have declined rapidly.
During the nine months to last December, the number of vehicles made in Iran which carry the Renault and Peugeot badge declined by 65.8% and 34.5% respectively compared to a year earlier.
According to the Industries Ministry, during the nine months 39,629 Renault cars were made in Iran, down 65.8% compared to 116,018 units manufactured a year before.
Production of Peugeot sedans is slightly less affected by the new US restrictions. In the said period 214,823 cars were made in Iran with the company’s lion badge. The number was down 34.5% compared to 328,169 vehicles made in the same period last year.
Peugeot Status
Peugeot has strong ties to local automaker Iran Khodro. As per production reports, IKCO currently produces three Peugeot models namely, Peugeot 405, 206 and 2008.
In the nine months, of the 214,823 Peugeot cars made in Iran, 116,490 were Peugeot 405 (45% of all Peugeot cars), indicating a 41.4% year-on-year decline from 116,490 units made last year.
Peugeot 206 had a 43% share of the total Peugeots made in the country. Production of the popular hatchback fell 27.8%.
In the period hardly 5,492 units of Peugeot 2008 were manufactured. The vehicle was to be made as per a joint venture between IKCO and the famous French carmaker – a contract signed after Iran and the six world powers endorsed the historic nuclear deal in 2016.
After the beleaguered US President Donald Trump unleashed a new wave of hostile economic restrictions on Iran, Peugeot suspended its collaboration with its Iranian partner.
Last December IKCO barely produced 12,844 Peugeots indicating a sharp 69.4% fall compared to last year when it made and sold 41,962 units.
During the one month, daily production of Peugeot sedans in IKCO factories plunged to an unprecedented low reaching 428 cars from 1,398 last year.
Renault’s Condition
The other French carmaker that has a long history of close collaboration in Iran is Peugeot’s archrival, Renault.
The two main Iranian car companies IKCO and SAIPA have ties with Renault. Both Iranian firms manufacture Renault Logan (locally known as Tondar 90 or L90) and SAIPA makes Renault Sandero through its subsidiary Pars Khodro.
Data provided by the Ministry of Industries show that during the nine months 23,728 Logans were made -- down 69.3% from last year’s 77,299 units.
According to the Ministry of Industries data, in the nine-month period 39,629 Renault cars were made in Iran -- down 65.8% compared to 116,018 units sold during the corresponding period the year before
Production of Sandero also plummeted by 58.9%, dropping to 15,901 cars from 38,719 units during the same nine months a year earlier.
A closer look at the data shows Renault production in Iran further deteriorated in the past few months compared to Peugeot. During the month ending on Dec. 21, only 649 Renault vehicles were made, indicating a shocking 96% decline from last year’s 15,857 units.
Daily production of Renault sedans has plunged to 21 from 528 last year.
An Overview
During the nine months Iran’s auto production fell to 763,519 cars and commercial vehicles – decline of 31% year-on-year. During the period, 713,233 cars were produced, down 31.2% compared to 1,037,374 units made in the same period last year.
If all these disturbing numbers are anything to go by, itr must be said that much bigger challenges are in store. During the past Iranian quarter that ended in December, car production halved compared to the year before with output plummeting to 167,907 cars from 391,801 -- down 57% YoY.
Furthermore, in the Iranian month ending in December, 38,275 cars and 3,870 commercial vehicles were made respectively, indicating year-on-year decline of 72% and 59.4%.
IKCO and SAIPA
The two main auto companies, IKCO and SAIPA, are in disarray with both reporting 35.4% and 30.3% declines in production.
During the nine months, IKCO’s total output fell from 520,480 cars and commercial vehicles made last year to 335,953 this year -- a steep 35.4% Y/Y plunge. Data has it that IKCO produced 327,792 cars during the period – down 35.8%.
In the month to December the firm’s production sank further, from 65,769 last year to 19,372 cars, a 70.5% fall while daily output plummeted from 2,192 to 645 cars.
IKCO rival SAIPA too is in a precarious situation. Over the nine months SAIPA made 328,355 cars and commercial vehicles, -- down 30.3% compared to the 471,405 units made in he corresponding period last year.
In the month ending Dec. 21, SAIPA reported 75.9% fall in output with 15,572 cars and commercial vehicles. Daily production of the second largest carmaker dwindled from 2,156 to 519.
While most companies are quick to blame the US sanctions and Trump’s unending animosity, independent observers say mismanagement at SAIPA and IKCO also had a terribly negative impact on the key industry.