Renault in Talks to Buy Stake in Pars Khodro

VIENNA (Dispatches) -- French car maker Renault SA is in talks to buy a minority stake or manufacturing plants from its Iranian joint venture partner, according to an executive at the Iranian firm.

Date: 25 July 2015 - 22:12

News ID: ۱۶۴۲۲

Naser Aghamuhammadi, managing director of Renault’s partner Pars Khodro, said the French firm is "in discussions” to buy less than half of the shares in his company.
A spokeswoman for Renault declined to comment. People familiar with the matter have previously said that Renault executives considered investing in Pars Khodro should the West lift sanctions.
Renault is also in talks to buy infrastructure such as car plants owned by Pars Khodro’s parent company Saipa Group, Mr. Aghamuhammadi said. Pars Khodro assembles Renault models in its body shop in southern Tehran, using kits of spare parts delivered by the French manufacturer.
Western corporations have been fast off the mark in an attempt to expand or gain entry into the country following the July 14 signing of a nuclear accord between Iran and world powers. The agreement spells an end to Western European and U.S. economic sanctions against the Middle Eastern country in exchange for curbs to Iran’s nuclear energy program.
Aghamuhammadi was speaking at a Vienna conference promoting trade between the European Union and Iran—the first event of its kind since the nuclear deal was clinched.
Leading the charge into Iran are France’s two largest car makers—Renault and PSA Peugeot Citroën—among the most aggressive and active western companies salivating at the market potential of the country’s 80 million inhabitants. The two were among the top foreign car brands in the country before the sanctions.
Peugeot officially pulled out of Iran in 2012, while Renault maintained its joint venture partnership but had to drastically reduce its production as it was unable to import the parts it required due to the economic blockade.
Aghamuhammadi didn’t disclose the potential value of the transaction. Renault has $562.5 million stuck in Iranian bank accounts due to sanctions.
Before the sanctions, Iran had a thriving auto industry, producing a high of 1.6 million cars and commercial vehicles in 2011. However, the economic blockade reduced production to about 744,000 by 2013.
Renault and Peugeot have long been anticipating an end to the sanctions, according to people familiar with the matter, quietly negotiating with local partners in the months leading to the July 14 deal.
Just hours after the nuclear accord was announced, Peugeot said it was in discussions to build cars locally with a local partner Iran Khodro. It plans to transfer technology and source parts in Iran to construct cars on the latest Peugeot designs.
French Foreign Minister Laurent Fabius plans visit to Tehran on Wednesday in order to revive relations. France's main business lobby group, the Medef, is also sending a delegation of about 80 firms to Iran at the end of September.