IKCO Struggles to Produce Peugeot 2008

In light of mounting pressure from the public and officials Iran Khodro has increased its efforts for the production of Peugeot 2008.

According to Asbe Bokhar, IKCO has opened a line of credit with a hitherto unknown amount to finance auto parts imports for production of this specific model.

Head of the Industrial Development and Renovation Organization of Iran, Mansour Moazemi, last week recommended IKCO to build closer ties with the French carmaker.

IDRO is a government organization operating under the auspices of the Ministry of Industries and is a major IKCO shareholder.

IKCO and Groupe PSA’s Peugeot signed a €400-million deal in June 2016. Through the 50-50 joint venture, named Iran Khodro Automobiles Peugeot (IKAP), three models, namely Peugeot 208, 2008 and 301, are to be manufactured in Iran. The first locally-assembled IKAP car to arrive in the country is the Peugeot 2008. It is priced at 1.04 billion rials ($26,000) -- almost $9,000 over and above the price in international markets.

The Iranian company officially inaugurated production lines of Peugeot 2008 in May and soon after started presales. In a few days 16,000 units were presold. Customers gave 600 million rials ($15,000) in down payment.

IKCO has agreed to deliver the vehicles in one year. However, according to statistics released by the Ministry of Industries, so far only four units of the car have been produced. To meet the deadline and deliver the cars for which it has already received large amounts from the people, IKCO should assemble at least 2,000 units every month.

Earlier and during talks with Moazemi, the executive vice president of PSA Group (Peugeot-Citroën) for Africa and the Middle East said that lack of liquidity is hindering Peugeot’s planned operations in Iran.

Jean-Christophe Quémard says, “The lack of capital for purchasing and importing auto parts is impeding Peugeot operations.”

He has also been quoted as saying that Peugeot auto parts are stuck in the customs. “This is not an uncommon incident in the global industry. The problem will be solved soon. But for the time being, the problem has hampered our operations in Iran.” According to Asbe Bokhar, the auto parts are being released from customs at a slow pace, but the Islamic Republic of Iran Customs Administration has promised to ease the process.