Few good news stories seem to originate in Iran, but Renault wouldn’t agree.
The French automaker has inked a deal with the government of Iran to massively boost vehicle production in theÂ middle eastern country.
The joint venture announced today betweenÂ Groupe Renault and the Industrial Development and Renovation Organization of Iran (IDRO) seeks to increase investment and vehicle output. Renault will be the majority shareholder in the project, which suits world-straddling CEO Carlos Ghosn just fine.
â€œThe Iranian government wants to attract foreign investment in the Iranian car industry to bring competitive new products benefiting Iranian customers with respect to standard, quality and safety,” saidÂ his Excellency Mohammad Reza Nematzadeh, Minister of Industry, Mine and Trade of the Islamic Republic of Iran, in a statement.
Renault was seen as an “ideal partner” due to its 12-year presence in the country. Sales of all Groupe Renault vehicles in Iran rose 56.1 percent last year compared to 2014, the automaker claims. Last year’s sales totaled 51,500 vehicles, or just under 5 percent of market share.
The deal involves a joint engineering and purchasing center to benefit local suppliers, as well as a new production facility for Renault vehicles. The automaker expects an initial production capacity of 150,000 Symbol and Duster models per year.
With Tehran’s help secured, Renault can now realize its goal of building a complete distribution and dealer network in the country.
“With a 2 million vehicle market projected by 2020, Iran’s automobile market has undeniable potential,” Ghosn said in a statement.
Oddly, the deal comes one day after another French automaker, PSA Peugeot Citroen, publicly announced plans to reclaim the top sales spot in Iran. PSA suspended sales in 2012 after Iran’s nuclear program sparked an international boycott.