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Published On: Tue, Aug 8th, 2017

Iran signs biggest car deal ever with French carmaker Renault

nsnbc : Iran has signed its biggest deal ever with French carmaker Renault that runs into millions of dollars. The deal includes the production of some 150,000 cars per year. It is the latest advance by a European company into Iran’s consumer market, following the lifting of EU sanctions against Iran after the signing of a nuclear agreement between Iran and the P5+1.

Renault_Iran_2017French carmaker Renault has been operation in Iran since 2003, issued a statement saying that in the first half of 2017, its sales in Iran increased by more than 100 percent to 68,365 vehicles.

At the signing ceremony in Tehran, Iran’s Minister of Industry Mohammad Reza Nematzadeh said the deal with multinational automobile manufacturer Renault would “establish a research and development center for designing” in the country.

Renault executive, Thierry Bolloré, for his part, said that the deal would help transfer technology to Iran and reinforce Groupe Renault’s position there. He said in a statement, “This joint venture will enable an acceleration of our growth in this country.”

The deal is also expected to create about 3,000 jobs for the two Iranian companies – IDRO, or the Industrial Development and Renovation Organization of Iran, and the privately-owned Negin Group, which imports Renault products to Iran.

Officials elaborated at the signing ceremony that the plant located a little outside Tehran will produce Duster and Symbol cars starting in 2018. The plant would add 150,000 vehicles a year to the Iranian market above Renault’s already existing capacity of 200,000 vehicles a year in Iran.

The French automaker would be a majority shareholder with a 60 percent share in the deal. With this deal, the company will also have its own distribution network in Iran for the first time.

An agreement of this deal was first reached with Iran’s government last September. It’s worth $778 million and comes after the UN and European Union sanctions were lifted following Iran’s 2015 nuclear agreement with world powers to curb its controversial uranium enrichment program.

It’s worth noting that the deal between Tehran and the French carmaker follows new U.S. sanctions on Iran that were signed by President Donald Trump. Trump is said to have discussed ways to counter Iran’s influence in Mideast conflicts with French President Emmanuel Macron this weekend.

The U.S. legislation imposes penalties on people involved in Iran’s ballistic missile program and anyone who does business with them. Since the international sanctions were lifted, several Asian and European companies have raced for a share of Iran’s market since international sanctions were lifted.

In July, France Total SA and a Chinese Oil Company signed a $5 billion deal with Iran to develop the country’s massive offshore natural gas field. This was the first such deal for Iran – which has the world’s fourth-largest oil reserves and the second-biggest reserves of natural gas – since the landmark nuclear deal was struck.

With Washington approving a deal with 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 too are looking to rebuild their presence in Iran.

F/AK – nsnbc 08.08.2017

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