Full local production began in 1985, after the original British production lines were closed. The new owner in Britain, Peugeot, established a new contract whereby Iran Khodro would manufacture the Paykan with the same body panels but using Peugeot 504 engines and suspension, for six more years. This deal was similar to one in South Africa, where Hunters were once built with locally-made Peugeot 404 engines (from which the 504 units evolved) to meet strict local-content laws applicable in the late 1960s.