Renault joins Western rush into Iranian car market

Renault  has become the latest Western car manufacturer to return to the Iranian car market this week after it signed a deal with Tehran to produce at least 150,000 Duster and Symbol cars a year from a plant in the country’s capital, starting from 2018. The French company will be the majority shareholder in the new undertaking, and will set up its own distribution network in Iran for the first time. Annual  consumer demand  for cars  could reach two million, Renault-Nissan CEO Carlos Ghosn predicted, making it a market with “undeniable potential.”
If that prediction proves correct, production will have to almost double in the space of six years; in 2014, combined passenger and commercial vehicle production stood at 1.23 million units, with about 90% of that figure destined for consumer markets at home and abroad. Low labour and an abundance of raw materials combined with a domestic market market of 80 million Iranians  and as many as 400 million more consumers overseas,  the automotive sector  is already Iran’s second largest source of income after its energy hub, employs over 500,000 workers (around 2.3% of the labour force) and is widely regarded  as  a potential  production hub for Middle East and Central Asia. 
At the beginning of the year, as  soon as it became clear  that the Western sanctions imposed on Iran were to be lifted, the world’s automotive industry began queuing up to re-establish  business ties. In January, Daimler announced that its trucks division had signed letters of intent with both Iran Khodro Diesel (IKD) and Iran’s Mammut Group with a view to establishing a joint venture for local production and sales  of Mercedes-Benz trucks; it also confirmed that it was planning to resurrect itsIranian Diesel Engine Manufacturing Co. (IDEM) joint venture. In April. PSA Peugeot Citroen followed suit and  and obtained a license from the Iranian government to invest in Khodro Co. (IKCO), the biggest car manufacturer in the country

Source: isna