RE­NAULT SIGNS 660M EURO DEAL WITH IRAN

Long-awaited JV plans to build up to 300,000 cars per year

Kuwait Times - - BUSINESS -

TEHRAN: French au­tomaker Re­nault signed yes­ter­day a long-awaited joint ven­ture deal with Iran worth 660 mil­lion eu­ros ($779 mil­lion) to build up to 300,000 cars per year. The new deal puts Re­nault in part­ner­ship with Iran’s state In­dus­trial Devel­op­ment and Ren­o­va­tion Or­ga­ni­za­tion (IDRO) and pri­vate firm Parto Ne­gin Naseh. Re­nault will hold a 60-per­cent stake with IDRO and Parto Ne­gin Naseh 20 per­cent each.

“The first phase of this ac­cord worth 660 mil­lion eu­ros pro­vides for the an­nual man­u­fac­tur­ing of 150,000 cars,” IDRO head Man­sour Moazami said at a sign­ing cer­e­mony in Tehran.

He said the first cars will roll off the as­sem­bly line in around 18 months. The new ven­ture will pro­duce Re­nault’s Duster and Sym­bol models at a re­fur­bished fac­tory in Saveh, around 120 kilo­me­tres (74 miles) south­west of Tehran. A sec­ond, three­year phase will start in 2019 with pro­duc­tion ramp­ing up to 300,000 cars per year.

Un­der the deal, 30 per­cent of the cars and parts made by the ven­ture will be ex­ported. “We are happy to sign one of Re­nault’s most his­tor­i­cal con­tracts here,” said Thierry Bol­lore, num­ber two of the French car­maker, at the sign­ing.

“Within Re­nault, Iran is known for its great in­dus­trial po­ten­tial, its au­to­mo­tive in­dus­try in­fras­truc­ture, strong hu­man re­sources and unique geopo­lit­i­cal po­si­tion,” he added.

Un­like its chief com­peti­tor PSA, which makes Peu­geots and Citroens, Re­nault never fully quit Iran dur­ing the sanc­tions pe­riod and al­ready makes some 200,000 cars a year in the coun­try.

But it had to put a brake on its growth plans un­til Iran con­cluded a nu­clear deal with world pow­ers that came into force in Jan­uary 2016, eas­ing in­ter­na­tional sanc­tions.

“Re­nault has proved its com­mit­ment with a non­stop pres­ence in Iran since the be­gin­ning of its op­er­a­tion in 2004, and this sign­ing con­firms our strong in­tent and com­mit­ment for long-term op­er­a­tions as a strate­gic part­ner of Iran’s au­to­mo­tive in­dus­try,” said Bol­lore.

“This is a unique agree­ment in terms of in­vest­ment, of tech­nol­ogy trans­fer... of the devel­op­ment of Ira­nian tal­ent, and in the creation of a modern en­gi­neer­ing and pro­duc­tion cen­tre,” he added. Ne­go­ti­a­tions were painstak­ing, with Re­nault re­port­edly re­luc­tant to meet Ira­nian re­quire­ments to source 40 per­cent of their parts from lo­cal man­u­fac­tur­ers, which have strug­gled to keep up with in­ter­na­tional stan­dards.

PSA, which quit the coun­try when in­ter­na­tional sanc­tions hit in 2012, has been quick to re­build its pres­ence in Iran, which was the com­pany’s main en­gine of growth last year.

It signed a 400-mil­lion-euro deal in June 2016 to build 200,000 Peu­geots a year with Iran Kho­dro, and an­other with Iran’s SAIPA to build a sim­i­lar num­ber of Citroens. Over­all pro­duc­tion in Iran is ex­pected to reach two mil­lion cars a year by 2020, up from 1.2 mil­lion in 2016.

French firms have been at the fore­front of re­build­ing trade ties with Iran since the nu­clear deal, with en­ergy gi­ant To­tal sign­ing a bil­lion-dol­lar gas deal last month de­spite mount­ing pres­sure from Wash­ing­ton to iso­late the coun­try. —AFP

NEW YORK: Se­lect En­ergy Ser­vices Chair­man & CEO John Sch­mitz, fore­ground right, and com­pany ex­ec­u­tives and guests cel­e­brate their IPO as they ring the New York Stock Ex­change open­ing bell yes­ter­day. —AP

TEHRAN: (L to R) Thierry Bol­lore, deputy direc­tor of Com­pet­i­tive­ness at Re­nault, Man­sour Moazami, Chair­man of the Board of Di­rec­tors of IDRO Group, and Kourosh Mor­shed Solouk, deputy direc­tor of the Ira­nian Au­to­mo­bile Im­porters As­so­ci­a­tion, at­tend a sign­ing of a deal cer­e­mony in Tehran yes­ter­day, in the pres­ence of Ira­nian Min­is­ter of In­dus­try Mo­ham­mad Reza Ne­matzadeh (sec­ond left, back­ground). —AFP

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