How Will Renault Perform in Iran During Sanctions?

Khodrocar – just a while ago said IDRO CEO, Mansour Moazami, emphasizing on Renault’s active presence in Iran: Renault has not just started it main investments in Iran because we did not make it to live up to our commitments in the mutual contract. IDRO was supposed to take some steps to make the investments happen but it too long. Now we have done all we should have done and now the negotiations regarding Renault’s investments in Iran are back in progress.

Now the question is how is it that Renault is yet present and active in Iran? Does sanctions has nothing to do with Renault’s withdraw from Iran car market? What was IDRO’s commitment that it could not live up to it?

"Why it took long? Because IDRO was supposed to offer Bonro production line to Renault’s contract but talks regarding this matter are not over yet because the negotiations were unwantedly synced with Trump’s talks and the beginning of sanctions. Yet the contract is not cancelled and negotiations are on the go.” Said Saeid Madani, a supreme automotive industry expert to Khodrocar’s journalist regarding IDRO’s commitments toward the Renault-IDRO contract.

He went on answering the possibility of Renault’s presence in Iran car market considering the first phase of the new series sanctions: "Renault already has a base here in Iran. The Renault Pars company is stablished in Iran with Renault’s partnership which produces most of the parts domestically. Renault alike other European car companies are going to find their new way of cooperation with Iran.”

"Having Iranian based Renault Pars Company in Iran along with its 60 percent domestic production of parts, if the company can provide other 40 percent of the parts, the damages done by the sanctions would be limited for this company because of its limited dependence  to Renault.” Went on Madanai.

"Car making basically cannot be done 100 percent by one country because producing some ports are not economically logical even for some great car makers. That’s why even international car makers import some of their required parts from other countries and that is depended on how the relations have been set in between. We’d better increase our domestic share of part production much as we can.” Said Madani to clarify the possibility of other 40 percent domestic production of parts.

The expert responded to the question of Khodrocar journalist regarding the near future condition of car parts in Iran. Whether the lack of parts are going to happen again as it did back in 2012 sanction period: "The situation has become harder than before but we have also been tempered as well. Back then, some Chinese and little European companies helped Iran automobile industry with its difficulties. It is also imported that Renault has not abandoned Iran car market back then, just reduced production figures in order to not let the production line to halt. I believe Renault is going to take the very same steps this time, whatever, its presence is going to be continual.” 

"Sanctions affect everything undoubtedly. If Renault Pars can manage to provide the other 40 percent of the parts, they can survive until the sanctions reaches some resulting points. As experience has proven, the sanctions will not last long until they reach a final conclusion to get everything back on line as before.” Said Madani regarding the fate of Renault-IDRO contract along with the sanctions.

The first phase of the second series sanctions has caused Iran automobile industry’s international activities to face some serious twists and turns. There are a lot of automobile industry fate-determining factors tied to sanctions and that’s why we all have to wait and see how close the experts’ predictions regarding methods of bypassing the sanctions will come true.

Khodrocar Journalist and Translator: Shahab Anisi