Renault Looking at All Sides of Doing Business With Iran

As the beleaguered US president’s heightens his rhetoric about the six world powers landmark nuclear deal with Iran and in the process creating a new international crisis waiting to happen, the boss of a major European carmaker says the company is aware of the challenges in Iran’s huge market.

Questioned about the possible challenges to Renault’s planned multi-million-dollar investment in Iran amid the heightened US-Iran tensions, Renault CEO Carlos Ghosn said late last week “Obviously if it becomes impossible to deal with Iran we will put a plan together for the suspension of our business there, but that is not at all to say that we will leave Iran,” AP reported.

The French automotive giant is set to invest €660 million ($774 million) in its operations in Iran.

Donald Trump is expected to announce this week that he will decertify the nuclear agreement the previous US administration signed along with the five major powers and Iran in 2015. The mercurial American leader, rejecting the advice of his most senior aides and allies in Europe, has claimed that the historic deal “is not in the national interest” of his country.

The uncertain future of the so-called Joint Comprehensive Plan of Action and the hostility of the Trump White House has not deterred many foreign companies but has kept major international firms wanting to work with Iran at arm’s length. One of the big car companies now cooperating with Iran is not unaware of what may lie ahead and says he is prepared.

Two days after President Hassan Rouhani was sworn in for a second and last term, the French automotive giant signed a trilateral production deal with the Industrial Development and Renovation Organization of Iran and a local private company Negin Khodro on August 7.

Renault has a long history of presence in Iran and has never left the country. In July 2013, when the sanctions were tightened and created problems for industries, including the automotive sector, and while other European carmakers ended their ties to the country, Renault was one of the few international firms that endured.

During the interview Ghosn insisted that Iran’s market has a major potential. “If we cannot work there immediately, then we will work there in 1 year, 2 years, 3 years because I do not think that this is a situation that can last forever.”

Renault is one of the major carmakers in Iran and vehicles produced under its brand have a 10% share of the market. Data released by the company indicates that it sold 99,617 cars in Iran during the first eight months of the current fiscal.

A report published on the company’s website indicates that Iran has a 4% share in Renault global sales — the company sold 2.4 million cars globally during the eight months to August.

Renault’s sales report shows 82% YoY rise in the company’s sales in Iran. During the same period last year, the French auto giant sold 54,548 cars in the huge and expanding auto market.

 Iran Censures Trump Rhetoric

The nuclear pact and Tehran’s compliance has been routinely verified by the International Atomic Energy Agency and endorsed by a UN resolution. As a result, the other signatories, namely Russia, China, France, Britain and Germany, have expressed their strong commitment to the deal, even if the US under Trump walks away.

Foreign Minister Mohammad Javad Zarif censured the Trump administration for trying “very explicitly” to prevent Iran from “benefiting” from the nuclear agreement by creating a “tense atmosphere”.

Rouhani has also played down the US threat to quit the accord for allegedly being too generous toward Iran saying that Iran could not be denied what he called the “irreversible” benefits it has already reaped from the breakthrough nuclear accord.

“No one can reverse the gains we achieved during the nuclear negotiations and under the deal,” the president said on Sunday in defense of his government’s performance during the sensitive nuclear talks.

The crucial and mostly tense negotiations dragged on for more than two years and culminated in the JCPOA and now has the robust backing of the international community (minus Trump) that has no appetite for more crisis and chaos on the global stage.