Indicators of an increasingly-crippled country

[norcal505]

For today's topic in 505T-OT, I thought I'd share a story about something that would familiar to anyone on here who loosely-follows world politics. As many of you know, the Islamic Republic of Iran has been suffering from severe economic sanctions since it started facing growing pressure from the Western world regarding its nuclear program. With main aggressors in the effort having been coming from America and Europe, it's clear to see that the embargo has been able to hit Iran in the most sensitive of areas.

Iran is a nation that makes a fair share of its economic earnings off of its manufacturing industry. Amongst the more well-known of its industries (such as oil, food, and textiles), is its Automotive industry. While these other mentioned industries may not require much in foreign-produced capital goods/services, the automotive industry is one that surely does.

One example within Iran's automotive industry is the French-Iranian alliance between Peugeot PSA & Iran Khodro, the nation's leading, and primary automotive management and production corporation. Iran Khodro has been building Peugeots in Iran for many years, most commonly: the 504, 405, 206/7, and other models based off the original-Peugeot blueprints. There were even talks in bringing some more modern Peugeot models, such as the 407 to the country.

However, another story in recent times (also covered by André on this forum) has been the new venture between General Motors and Peugeot PSA. One could see where this is going, with the American ownership of such a firm...Anyhow, with the recent venture between the American and French corporations, GM has put a significant amount of pressure on Peugeot, based on political aspirations.

It is no surprise that now that Peugeot announced that it will cut ties with Iran Khodro back in September. Just to show how detrimental this has been to the Iranian industry sector, Iran's total car production output sharply dropped 60% - just in the month of September (The UK Times). With that, I don't even know what Octobers figures were, nor what this month's will be.

Lastly, I write this from a fairly neutral standpoint. While I may be an American of watered-down Iranian descent, I still can sympathize with the petrol-heads of Iran on this one. Peugeot has been a big part of Iranian car-culture for the last century. In fact, Peugeot's largest market outside of Europe is the Iranian car market. You could ask any Iranian what a Peugeot is and they'd smile - something unfortunately which cannot be found in America. I don't think I'd even be owning Peugeot today if it weren't for Peugeot's presence in Iran back in the 20th century. My father, who was the original owner of my 505, bought the car solely based on the marque's reputation and large-following back in his home country, where my grandparents owned a 404 and 403.

What really bothers me out of this whole deal is that the Peugeot following in Iran will most likely, and ironically, be suffering a fate similar to the Peugeot following in America. While there will still be plenty of Peugeot's around for this generation of young Iranians, the next generation will larely most likely not know what a Peugeot is, just like in America.

-Sina