Renault Prepares to Resume Export of Component Kits for Iranian Assembly Pending Sanctions’ End

Pars Khodro production line for Renault Megane

As governmental negotiations proceed with Iran, Renault is going forward with plans to resume exporting car parts there, pending the easing of trade sanctions. Gilles Normand, chairman of the automaker's Asia-Pacific region, said in a Tehran interview, "We can start the preparatory work" with suppliers while "waiting for the go-ahead on the possibility to exports parts to Iran."

 

Normand said such exports would also require the establishment of channels for financial transactions with the country. A tentative agreement reached last month between six world powers and Iran would allow the lifting of some sanctions on Iran's auto industry. The export of parts to Iran would facilitate the assembly of partially built cars. Until recently, French companies PSA/Peugeot Citroen and Renault shipped component kits to Iran for final assembly by local partners Iran Khodro, Pars Khodro, and SAIPA.

Normand was in Tehran for the Auto Industry International Conference. He said it will be some time before actual exports can begin. "There is work to be done since the agreement was signed and clarification on the rules is expected around January 2014," he said. "We are following an extremely pragmatic policy and respect international regulations."

Before the French automakers stopped component shipments, PSA's 2011 sales were 458,000 units, a 29% share of the Iranian market, with Renault taking a 6% market share. Iran's well developed domestic car industry had its peak production that year, 1.6 million cars and analysts expect the fast growing market to soon  surpass 2 million vehicles annually. Half of the vehicles in Iran are at least 25 years old, in part due to a series of international sanctions against Iran intended to curb its development of nuclear weapons. The preliminary agreement call for the Iranian government to freeze parts of its nuclear program in exchange for a six-month suspension of trade sanctions on selected goods including auto parts.

As French automakers look to return to the Iranian market, American carmakers are still subject to a U.S. trade embargo that bars them from doing business in Iran that will not be affected by the proposed international agreement.

from The Truth About Cars http://www.thetruthaboutcars.com

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