Renault and Iran enter into one of the biggest ever car deals, to produce 150,000 cars

The Dollar Business Bureau

French car maker Renault and Iran signed a mega JV on Monday in the presence of the Iranian Industry Minister, Mohammedreza Nematzadeh. The JV could change the tide of the car maker in the oil rich Middle eastern country.

Many Western companies have made a beeline to do business in Iran with the lifting of the sanctions. The joint venture was signed between Renault and Industrial Development & Renovation Organization of Iran (IRDO). Renault will be the majority shareholder holding 60% of the shares, with IDRO and another private player Parto Negin Naseh taking up 20% each.

The production of the cars will begin in 2018, with both the parties agreeing to set up an engineering and sales centre to support the development of Iranian auto parts suppliers as well as support a plant that is targeting to manufacture 150,000 vehicles a year. Renault presently produces 200,000 vehicles in a year.

The first models to be produced at the unit will be the Duster and Symbol cars, a Renault spokesperson told the media. 'We are happy to sign this agreement with IDRO and Parto Negin Naseh Company. In a rapidly expanding Iranian market, it was vital to implement plants, engineering and purchasing center," he said.

"This joint venture will enable an acceleration of our growth in this country.”

Addressing the media during the signing ceremony, IDRO’s Chairman, Mansour Mozzami said, the deal is likely to create 3000 jobs and increase the number of vehicles manufactured annually in Iran to 3 million by 2025.

Iran and Renault had come to an understanding for opening the manufacturing unit during the Paris Auto Show in 2016.