Renault likely to pull out of Iran due to sanctions
Renault
SA is shaping up to be the latest French company to fall victim to Donald Trump’s renewed sanctions on Iran — even if it doesn’t sell cars in the US. Iran operations are likely to be put on hold to comply with US sanctions, Renault chief operating officer Thierry Bollore told analysts during a conference call about earnings yesterday.
“We are looking to new business opportunities, particularly in Africa, with strong growth to offset the missed opportunities in Iran,” he said.
Renault’s French rival, PSA Group, which makes Peugeot and Citroen cars, also suspended its push in the country after the US cancelled a 2015 nuclear accord with the Islamic republic. French energy companies Total SA and Engie SA also are heading to a pullout. Renault has no presence in the US, but its long-time partner Nissan Motors Co, in which Renault owns a majority stake, sells autos there.
Renault had been reviewing options, aiming to keep at least a small presence in the Persian Gulf country, like it did after the previous round of sanctions, chief executive officer Carlos Ghosn had told shareholders last month.
Renault signed an agreement last year with Iran’s Industrial Development and Renovation Organization and local dealer Parto Negin Naseh to boost its local production by 75%. The company hadn’t yet started manufacturing vehicles or making investments under the deal, according to chief financial officer Clotilde Delbos, but has been producing cars there since 2003 with two other partners.
The US administration this month rejected France’s demands for a waiver or exemption for companies seeking to do business in Iran. Even companies with no business ties to the US find it difficult to operate in Iran because banks are reluctant to finance Iranian operations.
In the first half, Renault’s sales in Iran fell 10%, for a market share of 8%, due to the Iranian central bank policy, Ms Delbos told reporters yesterday. She added that Iranian sales would be near zero in the second half.