Renault was the only western carmaker that did not leave the country when the sanctions against Iran intensified, said the managing director of Renault Middle East at a press conference on Thursday.
Peyman Kargar added that Renault sees Iran as a strategic business partner and the scope of collaboration naturally goes beyond stability: It needs to encompass several aspects in the auto industry, including local production of vehicles, auto part manufacturing and future partnerships.
"Security was not the main concern for Renault; that is precisely why the company never left Iran. Rather, it stayed and fulfilled its duties to its customers while upholding international regulations," he said.
Kargar admitted that the fact that Renault never left Iran—unlike other European carmakers—does not necessarily mean that everything was hunky-dory for the company.
"Limitations were in place and they took a toll on Renault's performance in Iran," he said.
In 2012, the French company would produce 450 vehicles in Iran on a daily basis. In July 2013, the sanctions intensified and affected the auto industry.
"Although the company managed to prevent production from halting, production declined and sales dipped during the past two-and-a-half years, and Renault suffered losses," he said.
According to Kargar, despite the decline in production, Renault continued to produce at least 50 vehicles per day.
He explained that during the same period, measures were taken to launch two major mass production projects: Logan (L90) pickup and Sandero.
The pickup entered the market last month, whereas Sandero will be unveiled late August and presales will begin then.
During the same period, Renault tested a number of its models (Koleos, Latitude, Safrane and Duster) in the form of Complete Built Up (CBU) units on the market. The long-term plan is to produce models that prove to be popular in Iran.
Kargar said 800 Dusters were sold in Iran over the Internet in only four hours without the company employing promotional techniques, such as discounts, or even displaying the vehicle in showrooms. Thus, Renault has decided to produce this vehicle inside Iran.
Renault is also currently testing Captur and Clio 4 to see whether production in Iran can be feasible.
Kargar noted that Iran is currently Renault's industrial base in the Middle East and the company wishes to source the expanding Middle Eastern market via Iran.
At present, Renault is ready to use the infrastructure it has developed in the past two-and-a-half years to accelerate production. It has also been negotiating with major partners to launch new projects in future.
Future Plans
Elaborating on Renault's future plans in Iran, Kargar said the production of vehicles currently underway must increase.
"These include the L90, L90 pickup and Sandero. Annually, Renault should be able to produce at least 100,000 Logan sedans, 100,000 Sanderos and 10,000 Logan pickups," he said.
Renault is currently producing 220 vehicles daily, 100 of which are produced in Pars Khodro and 120 in Iran Khodro. The figure will increase to 300 and 500 by mid-September and the end of December 2015 respectively.
He also said Renault will be launching new projects in Iran to bring the company's latest models to the country.
"The company will be producing Duster at Pars Khodro's plants. Additionally, in collaboration with Iran Khodro, three other models will be produced, which are face-lifted version of L90, Captur and Clio," he explained.
Kargar added that Renault is also streamlining its partnership strategies in Iran.
"The company plans to gain a stronger foothold in Iran, which is why it plans to set up a research and development center in the country that will boost the quality of products manufactured inside Iran," he said.
Renault will be producing on two sites of Saipa and Pars Khodro. The French company also has a long-term business plan for collaboration with IKCO to produce on its sites.
The CEO of Renault Pars added that auto part manufacturing is vital for the French company; thus, they also plan to develop this sector and will be sharing the latest technologies with local auto part manufacturers.
Rumors
Kargar also shed some light on recent rumors regarding partnerships with Iranian auto manufacturers.
He stressed that future collaboration will not be exclusive, stating, "Renault will continue to work with both IKCO and Saipa. Separate long-term business plans have been prepared and different products have been considered for each company; [unlike the L90] the same model will not be simultaneously produced by both."
He also denied that Renault will be buying shares in Pars Khodro, explaining that "we are not sure if that is the best option we have right now".
Kargar concluded by saying that Renault's main concern for now is to focus on production plans and it is gearing up for rising competition in Iran's auto market.
