PSA has signed production deals worth 700 million euros ($768 million), while Renault has announced a new plant investment to increase its production capacity to 350,000 vehicles a year, according to a report by Reuters on Tuesday.
PSA and Renault declined to comment on their Iranian operations in detail.
The French companies have no manufacturing or sales operations in the United States and this has made them less vulnerable to penalties for any violation of US sanctions still in force which ban financial transactions with Iran.
There has been growing enthusiasm for ties and cooperation with Iran since a lasting nuclear deal between Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) took effect on January 16, 2016.
The deal, also known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions on Iran and prepared the ground for a much-anticipated economic boom.