Renault may leave Iran due to sanctions

Company’s COO says carmaker is looking at new opportunities, particularly in Africa

Renault SA is shaping up to be the latest European 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.

Since debilitating sanctions were eased in 2016, Iran emerged as a hot spot for growth, and trade with Europe surged to more than $10 billion (Dh36.7 billion). Now that the US has cancelled a 2015 nuclear accord with the Islamic republic and re-imposed trade curbs, companies are rushing back out.

Renault’s French rival, PSA Group, which makes Peugeot and Citroen cars, also suspended its push in the country. French energy companies Total SA and Engie SA are also heading to a pullout, along with other European industrial giants including Germany’s Siemens, which agreed to supply turbines to the country, or plane maker Airbus, which had won an order for 100 planes. Payments processor Ingenico Group said last week it’s phasing out its activities in Iran.

Even as European government vowed to stand by the nuclear accord, which ended Iran’s programme to develop nuclear weapons in exchange for access to global markets, the reality is far more complex. Take Renault: It has no presence in the US, but its long-time partner Nissan Motors Co., in which Renault owns a majority stake, sells autos there.

The automaker had been reviewing options, aiming to keep at least a small presence in Iran, like it did after the previous round of sanctions, Chief Executive Officer Carlos Ghosn told shareholders last month.

Renault signed an agreement last year with Iran’s Industrial Development and Renovation Organization and local dealer Parto Negin Naseh Co to boost its local production by 75 per cent.