Renault Launches Gearbox Production in Tabriz

The Paris-based company has launched the manufacturing plant in collaboration with Iran’s largest auto manufacturer Iran Khodro (IKCO) and the Industrial Development & Renovation Organization of Iran.

The major stakeholder of the Charkheshgar plant is Iran Khodro Diesel.

The company is a subsidiary of IKCO and has been producing commercial vehicles, including several models of Mercedes-Benz trucks and tractors under the company’s license, reported Asre Khodro, a local automotive website, on November 1.

Charkheshgar has a nearly 70% share in the local commercial vehicles market.

Initially, the production site was designated for the joint production of gearboxes for Renault Tondar 90 (Dacia Logan) and IKCO vehicles, but the plan was mothballed due to the US-led sanctions.

Under the new joint venture between Renault and IDRO, the production line has been refitted to produce Renault’s JHQ transmissions. The new line is to enable Charkheshgar plant to produce all Renault’s J-series gearboxes as part of that company’s plans to expand operations in the Islamic Republic.

The French company claims that cutting-edge technology is used in its J-series gearboxes. Therefore, in addition to catering to the needs of Iranian carmakers, the joint product at the Tabriz plant can also be a base for exports to the Caucasus and Turkey.

The gearbox will be used in the recently released Sandero Stepway produced under the Renault-IDRO joint venture.

Renault has invested €1.5 million in the Charkheshgar production plant, which constitute 50% of the required capital, and the Iranian partner has provided the rest.

With an annual production capacity of 300,000 units, Iran will be the third country to produce JHQ gearboxes in the world, giving the country a better leverage in selling the product in the international market.

The technology transfer is to be completed in two years. This would be the first time the gearboxes production technology on this scale would be moved to the country.

One of the first conditions for newly formed joint ventures is to bring foreign companies’ technological know-how, as well as their sales and after-sales services to Iran.

The establishment of Charkheshgar production plant has been Renault’s first step in fulfilling its legal commitment toward technology transfer.

As part of the Renault and IDRO deal, a new factory exclusively for manufacturing Renault’s products will be created in the country for the Symbol and Duster models.

At a press conference in the Iranian capital on October 17, Peyman Kargar, CEO of Renault Pars and the company’s vice president for Africa, Middle East, Iran and India, said, “Within strategic partner countries, Renault’s production policies stipulate that local producers produce 60-80% of each vehicle parts.”

Charkheshgar production plant has been in the spotlight in the past few years with ZF Friedrichshafen AG paying about €10 million ($11.3 million) to acquire a 16.66% stake in the Iranian transmission manufacturer. Charkheshgar began cooperation with ZF on commercial vehicles in 1985.