Iran Khodro to discontinue XU7 and TU3 engine production

Iran Khodro CEO Hassan Gharaei has announced that the company will cease production of its XU7 and TU3 engine models starting in 2027 (1406 SH). This decision is part of a strategic plan to modernize the manufacturer's powertrain portfolio and reduce reliance on older engine technologies.

The XU7 engine has been a staple in high-volume models such as the Peugeot 405 and Peugeot Pars, while the TU3 engine has been utilized in various versions of the Peugeot 206 and 207. By phasing out these legacy engines, Iran Khodro aims to streamline its production processes and supply chain management.

The company plans to shift its focus toward more advanced engine families, specifically the EF7 Plus and TU5 Plus series. The TU5 Plus, a 1.6-liter engine, features variable valve timing to improve performance and emissions. While the transition aims to enhance manufacturing quality, industry observers note potential implications for spare parts availability and after-sales service for existing vehicle owners.