Reporting "Asre Khodro", The Iranian official said Iran Khodro and Peugeot have inked an agreement worth 500 million euros ($545 million) to jointly produce cars.
According to the terms of the preliminary deal, each side will equally invest 250 million euros in the project, he added.
The source went on to say that Peugeot 2008 crossover, 208 supermini and 301 compact cars will be manufactured inside Iran under the 50-50 joint venture.
Noting that the number of the brands will reach five in the near future, he added that the agreement is likely to be finalized in the Iranian President Hassan Rouhani’s upcoming visit to France.
President Rouhani will be in Italy on January 25 before heading to Paris on January 27 to meet President Francois Hollande, along with prime minister and business leaders.
He is also expected to visit the Vatican and meet with Pope Francis there.
The Iranian president was scheduled to visit the three European destinations on November 14, but the trip was cancelled following a spate of deadly terror attacks in Paris.