Iran sanctions force Wallys to replace Peugeot supply chain
Sanctions-driven supply disruption leads Wallys to assemble Iranian vehicles in Tunisia.
Event / Economy
Wallys Cars Tunisia Expansion
Tunisia's automotive manufacturer Wallys Cars expands production with the Wallys 719 sedan, sourcing components from China and Iran through a complex international supply chain following Peugeot's market withdrawal.
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2026-08-14 to 2026-11-11 · UTC publication dates
Coverage begins 28 Jul, 08:18 UTC
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What happened
Wallys 719 incorporates 24-28% Tunisian components
The Wallys 719 vehicle incorporates between 24% and 28% Tunisian components, including tires, rims, exhaust systems, upholstery, fuel tanks, wiring, and certain glass elements. The remaining components are Chinese in origin, with the vehicle based on the Iranian-produced Peugeot 206 platform.
Wallys Izis presented at Paris Motor Show
The Wallys Izis was presented at the Paris Motor Show in 2008. The model featured a fiberglass body, galvanized chassis, and PSA Powertrain engine, and was homologated in Europe. Production began in 2009.
Iran Khodro and Wallys sign supply agreement
In 2022, Iran Khodro and Wallys Cars signed an agreement under which Iran Khodro supplies semi-knocked down (SKD) Peugeot 206-based vehicles to the Tunisian manufacturer for final assembly.
Wallys Cars founded as Tunisia's first automotive manufacturer
Wallys Cars was founded in 2005 following a meeting on the island of Wallis and Futuna between brothers Guiga and René Boesch, a former automobile constructor. The company was established as Tunisia's first automotive brand with the goal of launching domestic vehicle production.
Peugeot withdraws from Iran due to US sanctions
Peugeot was forced to abandon its business operations in Iran after American sanctions were imposed on the country. The company had been leading the Iranian automotive market and was preparing to launch Citroën, but sanctions compelled the French manufacturer to cease operations.
Wallys launches Wallys 719 sedan based on Peugeot 206
Wallys recently began commercializing a new sedan model called the Wallys 719, which is based on the Peugeot 206 sedan platform. The vehicle is manufactured through a supply chain involving Iran Khodro and Chinese components before final assembly in Tunisia.
Wallys final assembles Iranian 206 vehicles in Tunisian facility
Wallys Cars receives partially assembled Peugeot 206 vehicles from Iran and completes final assembly at its manufacturing facility in Kabaria, a suburb of Tunis. The process takes 40 hours per vehicle and is performed without automation using low-cost labor, with the facility assembling six vehicles per day.
PSA ceases parts supply to Iran Khodro for Peugeot 206 assembly
Starting in 2012, PSA stopped supplying spare parts to Iran Khodro for Peugeot 206 assembly. Iran Khodro continued production using counterfeit parts imported from China to replace original Peugeot components, and later restyled the vehicle as the Iran Khodro Runna.
Wallys Cars produces over 2,200 vehicles with 120 employees
Since its founding, Wallys has produced more than 2,200 vehicles equipped with Peugeot engines and employs 120 people in its Tunisian operations.
Wallys 719 priced at 47,140 dinars in Tunisian market
The Wallys 719 sedan is offered on the Tunisian market at a price of 47,140 Tunisian dinars, equivalent to approximately 14,000 euros. The vehicle includes features such as ABS, power steering, two airbags, Isofix seats, electric windows, air conditioning, and a hands-free kit, and is powered by a PSA 1.6-liter four-cylinder engine with 115 horsepower.
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2 alternative perspectives
Tunisia's Wallys Cars expands production with locally-made sedan
Tunisia's first automaker Wallys Cars launches locally-assembled sedan with significant domestic component content.