PARIS, Nov 25 — Efforts by PSA Peugeot Citroen and Renault SA to boost sales outside Europe’s slumping car market stand to get a boost from a deal to lift sanctions on Iran.

The French carmakers sold more cars in the country than European competitors before tension over Iran’s nuclear program forced them to halt exports. Those sanctions will be eased after world powers struck a deal yesterday that called for US$7 billion (RM22.5 billion) in temporary relief for the country.

“Peugeot and Renault are potentially the biggest beneficiaries among European carmakers,” said Erich Hauser, a London-based automotive analyst with International Strategy & Investment Group. “But for the car industry to really recover financing for exports needs to be available, so sanctions in banking would have to ease as well.”

Peugeot and Renault have suffered more than most other European competitors as sales in their home region slide to a two-decade low. Eased sanctions on Iran come at particularly opportune time for Paris-based Peugeot, which vied with Korea’s Kia Motors Corp. for the sales lead in the country. Peugeot is seeking to stem cash burn and boost sales outside Europe.

Right direction

Peugeot, Europe’s second-largest carmaker, sold 458,000 vehicles in 2011 in Iran prior to the trade sanctions, making the country the automaker’s second-biggest market after France. Chief Financial Officer Jean-Baptiste de Chatillon said last year that the sanctions had cut €10 million (RM43.6 million) a month from operating profit.

“Any indication that we could resume doing business with our partners in Iran goes in the right direction,” said Jean- Baptiste Thomas, a Peugeot spokesman. “We’ll see how we can do that the day sanctions are lifted.”

Peugeot shares rose as much as 5 per cent to €10.74 and were up 3.4 per cent at 10:18 am in Paris. The stock has surged 93 per cent this year, valuing the company at €3.75 billion. Renault advanced as much as 2.2 per cent to €65.82 in Paris trading.

Peugeot, which reported a first-half operating loss of €510 million (US$690 million) in its automotive unit, is considering hiring a successor for Chief Executive Officer Philippe Varin, who plans to step down next year, two people familiar with the matter said. The company is talks with China’s Dongfeng Motor Corp. about expanding a partnership to boost growth outside Europe.

Stepping stone

Renault sold more than 100,000 vehicles in Iran in 2012 and took a first-half charge of €512 million (US$693 million) as a result of its forced withdrawal from the country.

“This is good news for us as Iran is an important market for Renault,” said Florence de Goldfiem, a Renault spokeswoman. “We’re waiting to see what the conditions of redeployment of our activities in the country may be.”

Lifting sanctions on the auto industry could be worth US$1.5 billion in revenue for Iran, including precious metals and petrochemical exports, according to US government estimates. More than 1 million vehicles were sold in Iran before sanctions, according to a report by Ernst & Young.

“It’s an interesting market with growth prospects and potentially a promising stepping stone into the whole region for car manufacturers,” said Peter Fuss, a partner at consultant Ernst & Young in Frankfurt.

Daimler monitors

The deal struck yesterday with Iran set limits on the country’s nuclear program in exchange for the US$7 billion in relief from sanctions over six months. Kia said it’s waiting for more information from authorities before commenting on the potential impact on its business.

Iran agreed to curtail its nuclear activities and in return won an easing of “certain sanctions” on the auto industry, oil, gold and precious metals. The deal, which is reversible, releases some of Iran’s oil assets and allows it to keep exporting crude at current levels.

Daimler AG, the world’s largest truckmaker, scaled back its business in Iran in 2010 abandoning a 30 per cent stake in a diesel-engine venture with Iran Khodro Co. and halting deliveries of three-axle trucks. The Stuttgart, Germany-based automaker closed its office in Tehran in March 2011.

“We’re closely monitoring the current political developments in Iran, but we don’t currently plan to reenter the market,” Daimler spokeswoman Ute Wueest von Vellberg said. — Bloomberg