Radiofarda – A week after it was announced that French carmaker Peugeot-Citroen had left the Iranian market, Japan’s Mazda and South Korean Hyundai have also suspended contracts with Iran, according to a member of the parliamentary Industries and Mines Commission.
In an interview with the parliament-affiliated website, Valiyollah Maleki said June 12, “Mazda and Hyundai’s interests in the U.S. market are much more than in Iran, and they will not sacrifice their profit for the sake of Iran.”
According to Maleki, Iranian car manufacturer Bahman Motors has replaced Mazda with China’s Haval. Bahman Group is traditionally the Iranian company presenting Mazda’s products.
South Korea’s Hyundai resumed cooperation with Iran after the ratification of the Joint Comprehensive Plan of Action (JCPOA) or Tehran’s nuclear deal with world powers, to manufacture its I10, I20, and Accent models in 2017.
However, after U.S. President Donald Trump’s decision to leave JCPOA, Hyundai also prepared itself to end cooperation with the Iranian company Kerman Khodro in the Special Economic Zone, Arg-i Jadid.
French carmaker Peugeot-Citroen declared on June 4 that it would exit the Iranian market within two months.
In recent weeks, many multinational corporations including Total, Maersk, General Electric, Honeywell, Boeing, Luk Oil, Reliance, and Siemens have officially announced they will end their presence in Iran to avoid being sanctioned by the United States.
European oil refineries have also reduced the volume of crude oil they purchase from Iran.
In an interview with Radio Farda, Paris-based Iranian economist Jamshid Assadi said that even if the European parties to JCPOA remain committed, EU companies will leave Iran to avoid the risk of being sanctioned by Washington.
“Iran is currently in an unstable situation,” Assadi said. “As tension between Iran and Israel is intensifying, the giant investors will keep away from Tehran.”
According to Assadi, foreign companies were taking a “wait and see” approach even before Trump’s decision to drop JCPOA and were hesitating to invest in Iran.
Local news outlet Asr-i Iran reported on June 12, “The price of cars in Iran has increased from 20 million to 400 million rials (roughly from $4,700 to $9,700 based on official rates) since foreign auto manufacturers, including Peugeot-Citroen and Hyundai, have announced their intentions to leave the Iranian market.
South Korean media have reported that Hyundai Heavy Industries (HHI) is facing an increasingly uncertain outlook for its expanding business deals with Iranian companies amid the renewed U.S. sanctions against Iran.
HHI, which has the world’s largest shipyard, was supposed to deliver container ships to an Iranian shipping company starting in April but has yet to deliver a single vessel, reported the Korea Times on June 11.
In December 2016, after JCPOA was implemented, HHI signed a deal with Iran’s state-owned Islamic Republic of Iran Shipping Lines (IRISL) to build four 14,500 20-foot equivalent unit (TEU) container ships and six 49,000-ton tankers for petrochemical products. The contract was worth roughly $760 million.
Under the deal, HHI built the four container ships while its affiliate, Hyundai Mipo Dockyard, built the tankers. The vessels were supposed to be delivered in the second quarter of this year.
Despite a number of the ships now being finished, HHI has been unable to deliver the vessels to IRISL.
“All we can do now is take a wait-and-see approach. Not a single ship has been delivered to IRISL. It is impossible for us to deliver the ships with U.S. sanctions back in position,” an HHI official told the Korea Times.
This is not the first time Hyundai Mipo Dockyard has been hit by Iranian sanctions. A decade ago, it signed a contract with IRISL to build 10 tankers and seven bulk carriers, but only one ship was delivered because of an earlier round of sanctions imposed on Iran.