25068
French Carmakers Duel Over Iran
Economy, Auto

French Carmakers Duel Over Iran

France's PSA Peugeot Citroen, the biggest-selling European carmaker in pre-sanctions Iran, has suffered a setback in its bid to reclaim that status, as domestic rival Renault has picked up since they left.
Peugeot is struggling to negotiate a bigger manufacturing deal with partner Iran Khodro, the country's largest automaker, amid lingering anger over its abrupt 2011 withdrawal, Reuters reported.
Now Renault plans to use $560 million of its cash that had been trapped in Iran to seize the advantage, after July's international deal to lift sanctions in exchange for nuclear curbs on Tehran, people familiar with the matter said.
"Our strategy is to be the biggest carmaker in the country," said a Renault source with knowledge of the discussions.
"PSA has made a lot of statements (about Iran)," the Renault source said. "Chicks shouldn't be counted before they are hatched."
With 80 million consumers and 1.1 million cars sold in 2014, Iran is already the Middle East's biggest auto market and has potential for rapid growth. The lifting of international sanctions may begin as soon as March, Britain's foreign minister said last week, opening the way for investment.
For Renault and Nissan, its 43.4%-owned alliance partner, Iranian production would bolster an already strong presence in emerging markets.
Reclaiming Iran is even more critical for Peugeot, racing to expand outside Europe after a brush with bankruptcy. The company said recently it was counting on Iran for about 400,000 annual vehicle sales by 2020.
Peugeot remains in talks "with various partners, including Iran Khodro" on a manufacturing venture, a spokesman said.
Renault declined to comment.
The tussle pits Peugeot Chief Executive Carlos Tavares against his former boss, Renault CEO Carlos Ghosn, for the main prize—a major manufacturing deal with Iran Khodro.
Under earlier agreements with both French carmakers, the Iranian company builds Renault and Peugeot models from pre-manufactured kits known as complete knock-downs.
Peugeot's Iran sales peaked at 458,000 vehicles, nearly 30% of the market, before it halted deliveries four years ago under pressure from then-partner General Motors.
The French company now tolerates Iran Khodro's "unauthorized" assembly of Peugeots from grey-market parts. But their estrangement is a gift to Renault, Volkswagen and other rivals now poised to muscle in.
"Peugeot must know that it must account for its past behavior," Iran Khodro chief, Hashem Yekezare, told IRIB in late July, adding that the French carmaker "will not be our main partner".
Renault has been working behind the scenes to fill that vacancy, company sources said, and sees potential for annual production of 400,000 cars in Iran by 2020.
"Unlike PSA, we have always remained in Iran," a Renault source said. "Loyalty should pay."
Renault is also touting lower-cost vehicle platforms that its rivals mostly lack. VW has been struggling for years to develop dedicated emerging-market cars, while Peugeot's equivalent lineup will not begin to reach showrooms before 2019.
Leading industry forecaster IHS Automotive expects Renault to claim as much as 12% of a transformed Iranian market in 2020, two or three percentage points ahead of Peugeot.
Renault's extensive lineup of affordable cars is "best positioned for Iran", IHS analyst Michel Jacinto said.
Under existing partnerships with Iran Khodro and smaller player SAIPA, Renault is preparing CKD production of its Sandero small car and Logan pickup while discussing a full manufacturing investment to include a mini-SUV just launched in India.
Financial sanctions that had stranded Renault's Iranian earnings now offer a head-start, by keeping rivals out until the embargoes are lifted in the coming months.
"Rather than repatriating the cash, the idea is to make the most of it," another Renault source said.
One possibility is "to buy a chunk of an Iranian company", he added, an option that was rejected as too risky when last considered more than a decade ago.
Renault and Peugeot executives are expected to join a French business delegation visiting Iran from Sept. 21-23.
The French government, a major shareholder in both carmakers, has "put the case for the two groups" to Iranian leaders, Foreign Minister Laurent Fabius said on July 30.
While Renault's plans were "positively welcomed", however, Tehran officials still criticize Peugeot for its earlier retreat, Fabius said. "So that may prove more difficult."

 

Short URL : https://goo.gl/zHcrlC
  1. https://goo.gl/7gs2oC
  • https://goo.gl/8ADeoj
  • https://goo.gl/nTXIWT
  • https://goo.gl/w0TzOE
  • https://goo.gl/sek0YX

You can also read ...

BMW’s Tech-Stuffed Concept SUV Heralds Fancy, Electric Future
Changing notions of what customers want from cars have pushed...
Tesla Hits New Speed Bump
Tesla Inc’s Chief Executive Officer Elon Musk on Sunday...
Oil & Gas Sector Most Conducive for Business
The research arm of Iran’s Parliament has conducted a first-of...
3 CBI Officials  to Leave
Following the recent passage of the law banning the employment...
CBA Concerned About Forex Outflow to Iran
The Central Bank of Afghanistan raised concerns about the...
Anzali Port to Be Connected to National Railroad
Anzali Port in the northern Gilan Province will be connected,...
Mineral Trade Surplus Hits $2.9b
Iran exported more than 25.47 million tons of mineral products...
Departure Tax Revenues  Up 117 Percent
The government earned 3 trillion rials ($24 million) from...

Trending

Googleplus