As you probably know, the attitude of the world’s major powers towards Iran has shifted dramatically in recent months, culminating with the signing of a provisional agreement that suspends trade sanctions imposed on Iran for six months in exchange for the country freezing key parts of its nuclear program.

The sanctions will be lifted beginning in January 2014 for selected goods, including auto parts. This means Iran will be once again open for business for automakers, with France’s Peugeot and Renault likely to benefit the most from the change of situation.

Both carmakers will use the six-month easing of trade restrictions to reclaim their market position before the mass arrival of competitors that could follow a permanent lifting of trade sanctions.

Iran’s car production peaked at 1.6 million vehicles in 2011; the year new sanctions were introduced. About half of that output came from leading manufacturer Iran Khodro, which has joint ventures with Peugeot, Renault and Suzuki. The country’s No. 2 manufacturer, SAIPA, also builds cars under license from Kia Motors, Renault and Nissan. Both local automakers also exported some of their locally-built vehicles, with the Peugeot 206 Sedan being the best-known model.

Peugeot sold 458,000 cars in Iran in 2011, accounting for 29 percent of the market, while Renault made up 5.9 percent.

U.S. carmakers meanwhile maintain the distance from Iran because the country’s trade embargo on Iran is not subject to immediate relief. However, they may reconsider their position at some point, since an embargo-free Iran is expected to be a fast-growing auto market soon exceeding 2 million vehicle sales annually, according to analysts quoted by Reuters.

By Dan Mihalascu

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