Win-Win Game of Renault in Iran’s Arena/The French Diamond Takes over Iran Market?

Regarding Khodrocar Journalist, after a year from the agreement between IDRO (Industrial Development and Renovation Organization of Iran) and Renault at Renault booth at the Mondial De La Automobile 2016, the final contract regarding the cooperation between French giant automaker and an Iranian private company with presence of an Old Iranian governmental organization was signed, roughly a month ago.

At first Renault was supposed to establish a joint company with IDRO to produce three different vehicle at Bon Ro (SAIPA-Zotye joint company) site. But days before the contract, Naseh holding started chattering aboutcooperation as well and sat on the contract table then to sign.

Obviously Naseh holding did not join the contract for fun. It is looking for two major goals. One, to become an automaker and gain share from production and two, through that, it can convince the ministry of industry, mine and trade that they are not only the importer who produces domestically but also it can benefit from Renault’s definite market share in Iran way more than current Negin Khodro.

Naseh holding currently have both Irtoya (the exclusive Toyota importer to Iran) and Negin Khodro (the exclusive Renault importer to Iran) companies and now with this 20 percent share not only has invested in auto making but also killed two birds with one stone by saving Irtoya and Negin Khodro throughout the inexpertly appointed resolutions of the ministry of industry, mine and trade because Naseh holding is now going to participate in domestic production as well as the exports.

From other viewpoints becoming a party to this contract, IDRO that has now came short of domestic auto makers and lost great amount of market share, took back its benefit of these past years from SAIPA by taking over Bon Ro Instead.

In this new contract among Renault, IDRO and Naseh holding all three parties are going to benefit, but they benefit differently. Renault has 60 percent share in this contract while IDRO and Naseh holding each take 20 percent. Considering that Naseh holding is held as Renault representative in Iran by owning Negin Khodro, so it can have more power over it 20 percent share and also a chair in board of directors while Negin Khodro could be used as a leverage anytime regarding the execution of the contract. Therefore Renault share would be a total of 80 percent and IDRO holds on to just that 20 percent.

On the other hand, Renault has now a powerful governmental partner next to itself, whose boss is the deputy of the minister of industry, mine and trade and his organization is the shareholder and a member of board of directors, therefore IDRO would prefer its greater share in this new contract rather than a smaller share in contract with IKCO or SAIPA. That because if IDRO wants to invest any capital into auto makers, its priority would be the contract with Renault.

It is important to consider that now Renault is present in IKCO, SAIPA as well as Pars Khodro and it also imports its higher end products through Negin Khodro while having greater share from the new contract.

Adding all this point into account we realize the win-win situation for this diplomat French automaker. Now is a good time for other auto makers such as Citroen and Peugeot to sit down at Renault classes and take tons of notes of business.

Khodrocar Reporter: Reza Hosseini