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UPDATE 1-Peugeot targets 150,000 vehicle sales in Iran in second half

(Adds Iranian minister visit)

PARIS, Sept 29 PSA Peugeot Citroen said it plans to sell more than 150,000 Peugeot vehicles in Iran in the second half of this year as the French carmaker seeks to reclaim the leading position it once enjoyed in the country.

Peugeot, the biggest-selling European automaker in pre-sanctions Iran, suspended sales in 2012 when an international boycott due to Iran's nuclear programme was extended to cars. Most sanctions were lifted in January.

The French carmaker's sales peaked at 458,000 vehicles before its withdrawal, nearly 30 percent of the Iranian market, but it now faces stiff competition from Chinese carmakers that have grabbed more business during the sanction years, as well as from western rivals such as Renault, who are also flocking back with newer models.

Iran's Minister for Industry Mohammad Reza Nematzadeh will visit PSA's Velizy research centre near Paris on Thursday to discuss cooperation with the carmaker, CEO Carlos Tavares told reporters at the Paris autoshow.

"This is the kick-off for the implementation of the deals we have signed," said Tavares, who will travel to Iran next week. Tavares wants to sell 300,000 Peugeot vehicles in Iran in 2017.

The Paris-based carmaker in July struck a framework deal with Iranian counterpart SAIPA to invest 300 million euros ($337 million) in the development and production of three Citroen models through a new joint venture.

The deal with SAIPA, Citroen's partner since 1966, follows a joint venture deal inked in June between stablemate Peugeot and state-owned Iran Khodro. PSA's smaller DS premium badge has also clinched a distribution agreement in the country. ($1 = 0.8913 euros) (Reporting by Gilles Guillaume; Writing by Ingrid Melander; Editing by Alexander Smith)

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