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Friday, May 25, 2012 5:45 PM UTC

Italian automaker Fiat halts sales to Iran

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Topics: From the Wires,

MILAN (AP) — Italian automaker Fiat SpA, which controls Chrysler, said Friday that it and subsidiaries will immediately halt sales to Iran, following similar moves by other carmakers under pressure to cut ties to Tehran over its disputed nuclear program.

The international community has been toughening sanctions on the Islamic Republic — including on its main cash cow, oil — because of fears that it plans to build nuclear weapons. Iran says its nuclear program is peaceful.

The auto industry has been under pressure from the anti-nuclear lobby group United Against Nuclear Iran to cut off business dealings with Iran. UANI says that the global auto industry is the second-largest source of foreign currency for the Iranian government, after oil, and also a source of foreign technology.

The decision by Fiat to halt sales “is a step in the right direction, and it shows the effectiveness of public pressure against these companies,” UANI spokesman Nathan Carleton said from New York.

Fiat and heavy-truck maker Fiat Industrial SpA said in separate statements that they “support international efforts for a diplomatic solution” regarding Iran. Both companies said their sales to Iran were “totally immaterial” in terms of numbers, and concerned only commercial and civilian products. Most of the vehicles sold were Iveco-branded buses and trucks, and no vehicles were produced in Iran, according to Fiat.

Fiat said its subsidiaries would honor binding obligations, which it described as limited, but that otherwise would halt “all business activity related to products or components where the ultimate destination … is known to be Iran.”

Fiat said anything sold to Iran was in compliance with U.N. rules and EU and Italian laws, which require certification of the end user.

The announcement follows similar ones in recent months by French automaker PSA Peugeot Citroen SA, which has entered an alliance with General Motors Co., South Korean automaker Hyundai and German sports carmaker Porsche.

More than a dozen foreign automakers continue to do business with Iran, said UANI, which noted that Iran’s auto industry is the 13th largest in the world, producing 1.6 million vehicles in 2011.

“No car company should be doing business in Iran,” Carleton said. “The international community is trying to isolate the Iranian regime from the rest of the world, and any company doing business with Iran is providing a lifeline.”

More Colleen Barry.

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