Iran coping with Peugeot exit

Iran's main automobile company, Iran Khodro, says it is coping with a decision early this year by troubled French car maker Peugeot to halt exports of vehicle kits for assembly, according to reports on Wednesday. "Iran Khodro has managed to become self-sufficient in producing 90 percent of the parts for the (popular Peugeot model) 206, and an effort is being made to use local suppliers for parts that were previously imported," company director general Hossein Najari was quoted as saying. Peugeot's parent company PSA Peugeot Citroen in February suspended its sales of car assembly kits to Iran, which had been its top export market in terms of trade volume up to then. The decision appeared to be tied to Peugeot's alliance with US group General Motors, and US sanctions pressure on Iran over its disputed nuclear activities. The United Against Nuclear Iran group, an influential US anti-Iran lobby group, says Iran Khodro is affiliated with Iran's Revolutionary Guards, which are subject to specific US sanctions. PSA Peugeot Citroen on Wednesday announced it will seek to cut 1.5 billion euros ($1.8 billion dollars) in costs over the next three years after declaring a 819-million-euro ($989-million) loss for the first half of 2012. Its exports to Iran, where locally assembled versions of its 405 and 206 models are prevalent on the roads, represented up to 800 million euros in revenue per year before they were suspended, according to figures given in Tehran. Iran automobile production has falled by a third in the past three months, mainly because of Western sanctions and Peugeot's decision.