Iran signs its biggest-ever car deal with France’s Renault
Renault featured among the top car brands in a ranking of European vehicles with the lowest carbon emissions. (Eric Piermont / AFP)
Amir Vahdat and Aya Batrawy, The Associated Press
Published Monday, August 7, two thousand seventeen Four:50AM EDT
Last Updated Monday, August 7, two thousand seventeen 9:56AM EDT
TEHRAN, Iran — Iran signed the country’s biggest-ever car deal on Monday to build ems of thousands of cars annually under a joint venture with French automobile manufacturer Groupe Renault, buoying its manufacturing industry in defiance of the Trump administration’s moves to isolate the country.
The (euro)660 million — or $778 million — deal goes after the lifting of the U.N. and European Union sanctions after Iran’s two thousand fifteen nuclear agreement with world powers to curb its controversial uranium enrichment program, a possible pathway to nuclear weapons.
It also comes just days after fresh U.S. sanctions on Iran were signed by President Donald Trump, who spoke with French President Emmanuel Macron over the weekend about ways to counter Iran’s influence in Mideast conflicts. The U.S. legislation, very first passed by Congress, imposes penalties on people involved in Iran’s ballistic missile program and anyone who does business with them.
American businesses have been cautious about pursuing business deals with Iran due to U.S. sanctions in place not related to the nuclear program.
Asian and European companies, meantime, have raced for a share of Iran’s sizable consumer market since international sanctions were lifted. Iran, with its population of eighty million people, sits atop the world’s fourth-largest oil reserves and the second-biggest reserves of natural gas. It also has well-established manufacturing and agricultural industries.
Just last month, France Total SA and state-runChina National Petroleum Corporation signed a $Five billion agreement with Iran to develop the country’s massive offshore natural gas field in the very first such deal since the landmark nuclear deal was struck. Also, Washington granted permission to Chicago-based Boeing and its European competitor Airbus to sell billions of dollars’ worth of aircraft to Iran in September 2016.
Renault and other European companies are looking to rebuild their presence in Iran following the lifting of international sanctions. Renault says that in the very first half of 2017, its sales in Iran enhanced by more than one hundred per cent to 68,365 vehicles — a almost ten per cent market share.
The fresh deal, very first reached with Iran’s government last September, will see Renault produce 150,000 vehicles a year in Iran at a plant located one hundred twenty kilometres (75 miles) outside Tehran. The plant will produce Duster and Symbol cars beginning in 2018.
Renault, a majority shareholder with a sixty per cent share in the deal, will have its own distribution network in Iran for the very first time. The company has been operating in Iran since 2003, however operations were halted when Iran came under international sanctions over its nuclear program.
During the signing ceremony in Tehran, Iran’s Minister of Industry Mohammad Reza Nematzadeh said the deal with Renault would “establish a research and development centre for designing” in the country.
A Renault executive, Thierry Bollore, said it would help transfer technology to Iran and reinforce Groupe Renault’s position there.
“This joint venture will enable an acceleration of our growth in this country,” he said in a statement.
The car deal is expected to create about Trio,000 jobs for the two Iranian companies involved: IDRO, or the Industrial Development and Renovation Organization of Iran, and the privately-owned Negin Group, which imports Renault products to Iran.
Also last year, French carmaker PSA Peugeot Citroen reached a deal to open a plant producing 200,000 vehicles annually in Iran. Peugeot was a major player in Iran’s car market before international sanctions were imposed.
Iran produces about 1,350,000 vehicles a year, however authorities hope that number will reach three million annually by 2025. There are around thirty car manufacturers in Iran, most of which assemble Chinese and Korean cars in Iran.
Batrawy reported from Dubai, United Arab Emirates
Photos
Chief Competitive Officer of Groupe Renault Thierry Bollore, left, Chairman of Industrial Development and Renovation Oraganization of Iran, IDRO, Mansour Moazami, center, and Negin Group CEO Kourosh Morshed Solouk join shows documents to media after signing a deal in Tehran, Iran, Monday, Aug. 7, 2017. (AP Photo/Vahid Salemi)
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