Renault Reports 110% Increase in Iran Sales

Iran has helped Renault’s bottom line and could do so again in 2017
The Renault Koleos is the latest new model to enter Iran after the sanctions were eased in January 2016.
The Renault Koleos is the latest new model to enter Iran after the sanctions were eased in January 2016.

Sales of Renault-branded vehicles in Iran doubled in 2016 to 108,536 units, according the company’s annual production report sent to the Financial Tribune.

Renault Group said sales boomed in the Iranian market with the easing of sanctions in the beginning of 2016, with an increase of 110.7% units shipped and produced.

The increase in sales and local production gives Renault a respectable 8.4% market share in the local market. This is up 3.7 percentage points on 2015 sales.

Renault reclaimed its position as a major player in the market through the past year, with increasing imports of fully built vehicles and also striking partnership deals with the Industrial Development and Renovation Company. The Paris-based firm also benefitted from the production of its latest Sandero and Sandero Stepway models in conjunction with Iran Khodro Group.

Sales of the “L90” Tondar Model (Logan) also increased compared to  the previous year, however the company does not state how many of this model was produced.

Renault’s proposal for the local market includes imports of fully built vehicles for bigger spenders, including the latest models available in all markets. These include the upgraded Koleos large SUV, large Talisman models and range of Megane models (dubbed Scalia) in Iran.

Meanwhile the company plans, as part of its joint venture with IDRO, to produce three new models for the domestic market by the end of 2017 or early 2018.

These include the low-cost Kwid crossover, Symbol and Duster models.

The joint venture is due to produce 150,000 cars per year. It was previously reported that Saveh City in Markazi Province (southwest  of Tehran) would be the production center for the joint project.

Renault used to sell 10,000 cars in the Iranian market every month till 2013 before the international sanctions were tightened in 2011 and 2012.

 Global Sales

Middle East, Africa and Indian subcontinent sales jumped 36.4% in 2016. The company managed to produce 491,151 vehicles, up from 360,029 in 2015.

Output of the wider group sales of Renault and sub-brand vehicles increased for the fourth year in a row as part of the company’s so-called ‘Drive the Change Plan.’

Accordingly, the company produced 3,182,625 vehicles across all its markets.

The group’s share of the world automotive market stands at 3.5% (up 0.3 points vs 2015). Both Renault and Dacia brands have registered record sales. Renault keeps its position as the world’s leading French brand against rival Peugeot, which it beat in terms of both sales and production.

 “In 2016 we sold 3.18 million vehicles worldwide, setting a new sales record. Our strategy of product range renewal and geographic expansion, underway for several years now, has proven to be successful. It enables Renault to progress significantly in terms of volume and market share in each region.” notes Thierry Koskas, member of the executive committee and group executive VP for sales & marketing.

 French Competition

Meanwhile, PSA Group (Peugeot-Citroen), also noted a growth in production and sales in the Iranian market through 2016.

The company said global vehicle deliveries rose by 5.8% last year, propelled by strong sales of its Peugeot brand in Iran.

PSA’s global sales volume rose to 3.146 million vehicles in 2016 from 2.972 million the previous year.

As part of the Citroen-SAIPA deal, the second largest Iranian car producer will overhaul its production facility and invest $300 million in development projects. Citroen has agreed to invest the same amount in the project.

Meanwhile, Iran Khodro, SAIPA’s main rival in the local market signed a deal with PSA Group in June 2016.

The 50/50 joint venture is expected to bring in €400 million over the next five years in manufacturing and R&D capacity.

As per that deal, the Peugeot 208, 2008 and 301 models will be produced for the Iranian and regional markets.

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