(Bloomberg) -- PSA Group, the maker of Peugeot and Citroen cars, has suspended its push into Iran, becoming the latest major European company to pull back after the U.S. canceled a nuclear accord with the Islamic republic.
The French automaker has begun closing down its joint ventures with Iranian carmakers Iran Khodro Co. and Saipa, it said in an emailed statement Monday. PSA said it is asking the U.S. for a waiver, with the support of the French government.
The retreat follows similar moves by French energy companies Total SA and Engie SA in response to President Donald Trump’s decision last month to withdraw from a 2015 nuclear pact with Iran. PSA’s financial targets won’t be affected, as Iran sales represent less than 1 percent of revenue, the manufacturer said. However, the impact will be felt by consumers. PSA has about a 30 percent share of sales in the market, Chief Executive Officer Carlos Tavares told shareholders in April.
Trump’s move has angered European allies and put companies like PSA under threat of sanctions as the U.S. backtracks from the hard-won nuclear deal. The Paris-based carmaker had returned to the market after the landmark nuclear agreement reached in 2015, which resulted in the lifting of some international sanctions.
Expanding to Iran was already “extremely complicated” due to banks’ reluctance, PSA said, but was made impossible when Trump decided to pull out.
French rival Renault SA, which set up a partnership with local companies last year, declined to comment. Volkswagen AG, which began selling vehicles in Iran last year, has said it would follow international rules.
PSA signed agreements with Iran Khodro and Saipa in 2016, with plans to build the new Peugeot 2008 crossover near Tehran, but the beginning of production has been delayed.
Still, the company sold almost 440,000 vehicles in the country last year -- mainly the supermini Peugeot 206 and the 405 family car, a spokesman said -- making it the carmaker’s biggest market outside of France. In total, PSA sold 3.63 million vehicles last year, including the Opel and Vauxhall brands.
Unlike Total, which stopped oil investments in Iran, PSA doesn’t have a significant presence in the U.S. Engie said it would stop its engineering contracts in Iran by November.
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