How Trump's Iran deal exit could hit car industry
Billions of dollars of deals signed by international companies with Iran are under threat after the US president, Donald Trump, announced he was pulling out of a “rotten” nuclear deal with Tehran.
Khodrocar - Iran’s agreement in 2015 to curb its nuclear ambitions led to the US easing crippling sanctions, in a rapprochement in which big firms seized an opportunity to invest in a global top-30 economy with a population of about 80 million.
Within a year, landmark deals were being signed in sectors including oil and gas, aviation and the automotive industry, with firms in France, the UK and Germany among the quickest to invest.
Shares in several large Iranian investors, including Airbus, Renault and the Peugeot owner, PSA, fell in early trading on Wednesday amid concern about the impact on trading, while oil prices reached a three-and-a-half-year high.
A new regime of sanctions means restrictions are expected on many things, from exports of US machine parts to loans made in dollars.
Companies with any exposure to Iran will also have to tread very carefully or face the prospect of huge fines.
Several partnerships involving European carmakers may come screeching to a halt due to fresh sanctions, with French firms particularly badly affected.
Renault and PSA, which owns Citroën, Peugeot and Vauxhall, saw their shares fall on the Paris stock exchange on Wednesday as investors digested the impact.
When sanctions were lifted, Renault of France signed a $778m deal to make 150,000 cars a year outside Tehran. PSA signed agreements with local partners to produce hundreds of thousands of vehicles in Iran.
In PSA’s case there was a significant rise in sales in a region where it was once the leading carmaker. PSA has said it hoped the EU could reach a common position on Trump’s new sanctions, without saying what that might be.
PSA was producing cars in Iran as part of a joint venture with a local firm, Iran Khodro. The Tehran firm also signed a deal last year with the trucks division of Mercedes-Benz, owned by Daimler of Germany, with car production slated to follow this year. The German auto firm Volkswagen had also restarted exports to Iran.
Source: theguardian.com
Within a year, landmark deals were being signed in sectors including oil and gas, aviation and the automotive industry, with firms in France, the UK and Germany among the quickest to invest.
Shares in several large Iranian investors, including Airbus, Renault and the Peugeot owner, PSA, fell in early trading on Wednesday amid concern about the impact on trading, while oil prices reached a three-and-a-half-year high.
A new regime of sanctions means restrictions are expected on many things, from exports of US machine parts to loans made in dollars.
Companies with any exposure to Iran will also have to tread very carefully or face the prospect of huge fines.
Several partnerships involving European carmakers may come screeching to a halt due to fresh sanctions, with French firms particularly badly affected.
Renault and PSA, which owns Citroën, Peugeot and Vauxhall, saw their shares fall on the Paris stock exchange on Wednesday as investors digested the impact.
When sanctions were lifted, Renault of France signed a $778m deal to make 150,000 cars a year outside Tehran. PSA signed agreements with local partners to produce hundreds of thousands of vehicles in Iran.
In PSA’s case there was a significant rise in sales in a region where it was once the leading carmaker. PSA has said it hoped the EU could reach a common position on Trump’s new sanctions, without saying what that might be.
PSA was producing cars in Iran as part of a joint venture with a local firm, Iran Khodro. The Tehran firm also signed a deal last year with the trucks division of Mercedes-Benz, owned by Daimler of Germany, with car production slated to follow this year. The German auto firm Volkswagen had also restarted exports to Iran.
Source: theguardian.com
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