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Renault Looks to Grow Automotive Presence in Iran

Executive Summary

‟Our ambition is to be the third-largest car manufacturer in Iran,” Renault executive Bernard Cambier says after the automaker signs a joint-venture production agreement with the state-owned Industrial Development & Renovation Organization.

PARIS – Renault is raising its profile in Iran.

Already cooperating with the country’s largest vehicle manufacturers, Iran Khodro and Saipa, the French automaker creates a joint venture car plant with the state-owned Industrial Development & Renovation Organization of Iran. Renault will be the majority shareholder.

A strategic agreement on the project was signed in the presence of Renault Chairman and CEO Carlos Ghosn and Mohammad Reza Nematzadeh, Iran’s Minister of Industry, Mine and Trade, at the Paris auto show.

“With a 2 million-vehicle market projected by 2020, Iranʼs automobile market has undeniable potential,ˮ Ghosn says. ‟The signing of this agreement corroborates the strategic choices we have made in Iran and opens a new era by enabling Renault to assume a very strong position.”

Adds Nematzadeh: “The Iranian government wants to attract foreign investment in the Iranian car industry to bring competitive new products benefiting Iranian customers with respect to standards, quality and safety.

‟Various options have been considered, and because of its continuous presence in the country for more than 12 years, Renault was the ideal partner for this project.”

The JV with an initial production capacity of 150,000 vehicles per year will adapt an existing plant in Tehran. The first vehicles to be produced will be Renault Symbol sedans, known as the Renault/Dacia Logan in other markets, and the Renault Duster SUV beginning in 2018.

‟Our ambition is to be the third-largest car manufacturer in Iran (after Iran Khodro and Saipa),ˮ Bernard Cambier, Renault senior vice president and chairman-Africa-Middle East-India Region, tells WardsAuto.

The new company will include an engineering and purchasing center that will support local suppliers.

For the first time in Iran, Renault will have its own distribution network with sales and aftersales dealers in line with Renault brand standards. Currently, locally made Renault vehicles are sold by the automaker’s production partners while imported models are distributed by import company Negin Khodro.

While Renault prepares for the new JV, it also continues cooperating with its two local partners.

The Renault Tondar 90 sedan, an Iranian version of the first-generation Renault/Dacia Logan, is manufactured by both Iran Khodro and Saipa subsidiary Pars Khodro. In addition, Iran Khodro builds a pickup version of the Tondar while Pars Khodro produces first-generation Sandero and Sandero Stepway hatchbacks.

The French automaker’s Iranian partners also are interested in producing new Renault models. According to Iranian media reports, both Iran Khodro and Pars Khodro are vying for the opportunity to build the Renault Kwid compact CUV currently manufactured in India.

‟Kwid is a jewel and clearly I am convinced that if we produce and sell this car in Iran it will be very successful,ˮ Cambier tells WardsAuto.

A final decision regarding a production site for the Kwid has not been made.

‟The first step is to finish the (JV) negotiations to assure our ambitions and after that we will see what we can do with the Kwid and where we can produce this car,“ Cambier says. ‟But it is sure that we will produce and sell the Kwid in Iran.ˮ

In 2015, Renault sales in Iran soared 56.1% from prior-year, reaching a total of 51,500 vehicles and 4.8% of market share. Growth has remained strong throughout the first eight months of 2016.

According to Cambier, more than 100,000 Iranian-made Renault vehicles will be sold in the country this year. One popular example is the Sandero Stepway which went into production last month at Pars Khodro.

‟The dealers took more than 5,000 orders with down payment in half an hour,” Cambier says. The taking of orders had to be stopped after 30 minutes because of a government rule that automakers only should take orders for cars they can deliver within three months.

 

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