Economy, Auto

Renault Weighing Partnership With IKCO, Saipa

Renault Weighing Partnership With IKCO, SaipaRenault Weighing Partnership With IKCO, Saipa

Renault has come under pressure by Iran's leading carmakers Saipa and Iran Khodro, with both companies putting forth their own set of demands for extending cooperation.

The Iranian automakers and Renault set up a joint company—Renault Pars—which provides the auto parts and platforms for manufacturing Renault's L90 and Sandero. The company is also responsible for transferring money from Iran to Renault France.

According to the Persian daily Donya-e-Eqtesad, the Iranian companies are not satisfied with how Renault Pars has been operating and hold it responsible for the delays in manufacturing L90.

Renault Pars has announced that their operation has been limited due to the debts of the two major car companies. The company says that because of western sanctions on Iran over its nuclear energy program, obstacles have hindered money transfers.

Due to growing dissatisfaction, Iranian companies have suggested that they exclude the intermediary company and directly go to Renault France themselves.

IKCO's management believes that the fact that Renault started working with both Saipa and IKCO simultaneously was a mistake, for this move does not create any productive competition. IKCO has said that it will continue to cooperate with Renault, only if Renault Pars no longer acts as intermediary.

Saipa's managers have also put forth a condition asking Renault to work only with them.  

As the western sanctions intensified in recent years, both automakers suffered a significant loss of earnings.

As each company now wants Renault to work exclusively with one of them, the situation is now difficult for Renault, which needs to make the final decision.

Needless to say, much will depend on the results of the nuclear talks undertaken by the six world powers and Iran.