French automaker PSA said on June 4 that it would pull out of two joint ventures to sell its cars in Iran to avoid the risk of U.S. sanctions after Washington withdrew from a key nuclear deal with Tehran.
“The group has begun to suspend its joint venture activities, in order to comply with U.S. law by August 6, 2018,” the maker of Peugeot and Citroen cars said in a statement.
But with U.S. President Donald Trump showing little inclination to spare EU companies, they must decide whether to continue to work in Iran if doing so puts their U.S. operations at risk of huge fines.
PSA, Europe’s second-biggest carmaker, signed deals with two Iranian automakers, IranKhodro and Saipa, in 2016 after sanctions were lifted following the landmark 2015 accord aimed at prevent Tehran from developing nuclear weapons.
Although it has been absent from the US market since 1991, the company said in January that it was hoping to launch a car-sharing service in one or two American cities.
But PSA, which also owns the Opel and Vauxhall brands, also noted that Iran sales still make up less than one percent of its total sales, and so exiting the country would not alter its financial guidance.
“With the support of the French government, the Groupe PSA is engaging with the U.S. authorities to consider a waiver,” it said.