Iran signs its biggest-ever car deal with France's Renault

Chief Competitive Officer of Groupe Renault Thierry Bolloré, seated left, Chairman of Industrial Development and Renovation Oraganization of Iran, IDRO, Mansour Moazami, center, and Negin Group CEO Kourosh Morshed Solouk sign documents for a deal in Tehran, Iran, Monday, Aug. 7, 2017. Iran signed the country's biggest-ever car deal with French multinational automobile manufacturer Groupe Renault on Monday to produce 150,000 cars, beginning in 2018. (AP Photo/Vahid Salemi)

Iran has signed the country's biggest-ever car deal to build tens of thousands of cars annually under a joint venture with French automobile manufacturer Groupe Renault

TEHRAN, Iran — Iran signed the country's biggest-ever car deal on Monday to build tens 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 €660 million — or $778 million — deal follows the lifting of the U.N. and European Union sanctions after Iran's 2015 nuclear agreement with world powers to curb its controversial uranium enrichment program, a possible pathway to nuclear weapons.

It also comes just days after new 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, 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, meanwhile, have raced for a share of Iran's sizable consumer market since international sanctions were lifted. Iran, with its population of 80 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-run China National Petroleum Corporation signed a $5 billion agreement with Iran to develop the country's massive offshore natural gas field in the 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 first half of 2017, its sales in Iran increased by more than 100 percent to 68,365 vehicles — a nearly 10 percent market share.

The new deal, first reached with Iran's government last September, will see Renault produce 150,000 vehicles a year in Iran at a plant located 120 kilometers (75 miles) outside Tehran. The plant will produce Duster and Symbol cars starting in 2018.

Renault, a majority shareholder with a 60 percent share in the deal, will have its own distribution network in Iran for the first time. The company has been operating in Iran since 2003, though 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 center for designing" in the country.

A Renault executive, Thierry Bolloré, 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 3,000 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, though authorities hope that number will reach 3 million annually by 2025. There are around 30 car manufacturers in Iran, most of which assemble Chinese and Korean cars in Iran.

___

Batrawy reported from Dubai, United Arab Emirates.

Related News

Iraqi Kurdish vote latest in series of de facto...

Sep 26, 2017

Iraqi Kurds' independence vote could mean further instability in Mideast, which has seen several de...

Existing only from the Nile, Egypt fears disaster...

Oct 2, 2017

Egypt fears disastrous blow to its lifeline, the Nile River, as Ethiopia rushes to finish massive...

In Egypt, archaeologists find part of...

Oct 18, 2017

Egyptian archaeologists uncover part of 4,000-year-old wooden statue likely depicting female regent...

Scientists discover hidden chamber in Egypt's...

Nov 2, 2017

Scientists say they have found a previously undiscovered hidden chamber in Egypt's Great Pyramid of...

Archaeologists discover 2 ancient tombs in...

Dec 9, 2017

Egypt's Antiquities Ministry says archaeologists have uncovered two ancient tombs in the southern...

Iran's working class, facing dim prospects, fuels...

Jan 6, 2018

Iran's protests over the past week have been centered in dozens of long-neglected cities and towns,...

Sign up now!

About Us

What if you could see what will happen to the world in the next 10 years? In The Daily Futurist, we explore mostly on geography, archaeology and natural science. See the future here in The Daily Futurist.

Contact us: sales[at]thedailyfuturist.com