PARIS, France — French car-maker Peugeot will return to Iran in a partnership deal with a local manufacturer worth 400 million euros ($436 million), according to an agreement signed Thursday during Iranian President Hassan Rouhani’s visit to France.
The deal will see Peugeot work with the manufacturer Iran Khodro, with the first vehicles expected to roll off the production line in 2017.
It makes Peugeot the first Western car-maker to announce a return to Iran since sanctions were lifted against the country after it signed a deal to limit its nuclear program.
Peugeot and its French partner Citroen will work with Iran Khodro to produce 200,000 vehicles a year using parts manufactured in Iran.
The aim is to produce the Peugeot 208, the 2008 sport utility vehicle and 301 compact models.
Rouhani called for a new relationship with France as he met business leaders in Paris to revive economic ties after sanctions on his country were lifted.
“We are ready to turn the page” and establish a “new relationship between our countries,” Rouhani said at a meeting organized by the Medef employers’ association.
“Let us forget the resentment,” he said, calling for all sides to take advantage of the “positive atmosphere” after the removal of the sanctions.
Peugeot pulled out of Iran in 2012 as Western sanctions imposed over the Islamic Republic’s nuclear program began to bite.
At the time, Iran was Peugeot’s second-largest market after France.
With the lifting of the sanctions, Iran has signed a raft of commercial deals and Rouhani is also expected to tie up an agreement to buy more than 100 passenger jets during his two-day visit to France.