Why Numerous Automakers Will Benefit from Iran Deal

Renault Clio V6

While reactions to the deal to lighten sanctions on Iran are mixed, automakers of the world are preparing for the return of a market that once ranked in the world’s top 15. According to the Associated Press, automakers from Renault (RNSDF.PK) to Peugeot Citroen (PEUGF.PK) are ready to begin capitalizing on the freedom to operate within the severely depressed Iranian market.

Peugeot and Renault both used to supply parts for Iranian automakers and sell cars of their own in the country, with Peugeot’s best year in recent memory the 450,000 vehicles sold there before sanctions intensified in 2011. After that point, Peugeot was forced to leave Iran and went on to suffer from a weak European market before falling far behind Volkswagen (VLKAY.PK) in second place among European carmakers.

It’s unclear whether the deal will have any effect on General Motors (NYSE:GM), which announced a partnership in 2o12 with Peugeot but has since slowed planned joint projects. A Reuters report in October indicated GM was backing away from significant involvement with Peugeot as the French automaker looked for a new Chinese partnership. Still, the ability to supply parts and sell cars in Iran could be a major boon for European companies.