Iran, Renault strike deal to ramp up auto output
Multimillion-dollar agreement comes just days after Trump hit country with new sanctions
TEHRAN, IRAN— French carmaker Renault signed a multimillion-dollar deal in Tehran on Monday, agreeing to raise vehicle production in Iran just days after U.S. President Donald Trump signed into law new sanctions against the Islamic republic.
The roughly $780-million (U.S.) agreement to produce up to 150,000 additional cars a year is the largest foreign auto deal in Iran’s history, state-run PressTV said. It was a victory for President Hassan Rouhani, who was sworn into office Saturday after being re-elected this year promising to revitalize a sanctions-hit economy.
Iran is increasingly attracting foreign investors, despite restrictions imposed by the United States over its missile program and its military activities in the region.
The economy has limped along, surviving mainly on oil sales in recent years, with youth unemployment topping 40 per cent and the state controlling many sectors. U.S. restrictions stop most international banks from providing financing or credit to Iran and the country is cut off from international payments systems for using debit and credit cards.
On Wednesday, Trump signed into law new sanctions against Iran, Russia and North Korea. It is unclear if the Renault deal violates any unilateral U.S. trade barriers still in place against business with Iran.
Still, the agreement to establish a joint venture with a government-run conglomerate is welcome news for Iran.
Renault has pledged to open two factories with Iranian partners.
Renault said in a statement that the expansion would promote its brand in Iran. The carmaker sold an estimated 68,000 cars in Iran in the first six months of this year, more than doubling its sales compared with the period a year earlier. Renault said it now has about 10 per cent of the Iranian market for autos.