Iran signs $778 million deal with French car company
TEHRAN | 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 $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 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.
The deal also would be a win for recently reelected President Hassan Rouhani, who has been under pressure to show ordinary Iranians the economic payoff from the 2015 nuclear deal, which curbed Tehran’s suspect programs in exchange for an easing of Iran’s international economic isolation.
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.
Iran also boasts a young, well-educated population hungry for access to many global consumer markets that have been closed to them for a decade or more.
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.
Iran signed its biggest-ever car deal with French multinational automobile manufacturer Groupe Renault to produce 150,000 cars, beginning in 2018.