France's largest auto maker, Renault, has begun talks with Iran's number 2 car producer Saipa, to buy "up to 20 percent" of the shares of Iran's third auto producer Pars Khodro, Trend reported this week.
Saipa currently owns the majority, or 74 percent, of Pars Khodro's shares.
Majid Souri, Saipa's director of stocks affairs, confirmed the news but told the Financial Tribune on Saturday that the talks are still "in their preliminary stages."
He also refused to give an estimation of the volume of Renault's possible share in Pars Khodro.
Last week, Trend reported that the French company will gain a seat on Saipa’s board of directors as soon as the negotiations are finalized “in a course of months.”
Renault seeks to boost its production in the Iranian market and the recent announcement would end months of speculations that the French company was looking to partner with one of the local car producers.
Mehdi Hajivand, Pars Khodro’s PR spokesman, on Saturday refused to comment on the talks, saying he could neither confirm nor deny a deal was underway.
He said reports of any possible deal at this point are “just rumors” but when questioned further, he responded by directing the Financial Tribune reporter to their holding company, Saipa.
Iran’s car production sector has been abuzz in recent months due to the lifting of sanctions on the domestic auto industry, as part of the Joint Plan of Action signed between Iran and the P5+1 group of major world powers in November 2013. Earlier this year, an article written in France’s Le Monde newspaper criticized American carmaker GM for “sneaking in” for talks with Iranian car manufacturers before any possible nuclear deal has been signed, much to the chagrin of the long suffering French automakers.
In other auto news, the deputy minister of industry, mine and trade has said a new contract has been signed between an Iranian car manufacturer and a foreign counterpart. The deal would be a breakthrough in foreign auto relations as a new car platform would be created in the country to produce foreign cars both for domestic consumption and foreign export.
Mohsen Salehinia in an interview with Mehr news agency said the joint cooperation agreement would allow Iran to develop a new common platform for the region and also a setup design center for car production in the region.
Salehinia also stated that “the foreign partnership strategy would allow an equal share for both local and foreign businesses when created, which is important for the development of new vehicles.”
Iran’s total car output has increased significantly in the past year starting from March 21. Some 625,540 cars were produced by Iranian carmakers in the first seven months of the year (March 21-October 22), showing a 71.4 percent increase compared to the same period last year.
Iran currently stands eighth in Asian ranking for car production, and is the world’s 18th largest car manufacturer. If the ongoing nuclear talks lead to a deal by a self-imposed November 24 deadline, experts believe it is likely that Iran will jump a few places in the ranking over the next decade.
