French carmaker Renault has announced it will make a direct investment of up to €500 million in Iran this week.
Renault added that it has prepared a comprehensive business plan to set up an engine factory inside Iran to lower their overall costs, Eghtesad News, the Persian sister website to Financial Tribune, reported.
The company also plans to develop its joint production lines with the two major Iranian car manufacturing companies Iran Khodro Company and SAIPA.
Renault has also announced that it is looking at the possibility of entering into partnership with a new Iranian auto company. The name of the company has not been mentioned and rumors link it to one of the new companies likely to be launched later this year.
In collaboration with IKCO, the French company currently produces the L90 (Tondar 90 or Dacia Logan) and the U90 pick-up. A face-lifted version of the L90 will also be produced in the future in collaboration with IKCO. The Capture and Clio models might also be produced jointly with IKCO in the future.
The company also announced plans to increase annual production to 300,000 units in Iran by March 2017.
According to the report, Renault plans to purchase Mega Motors, a small subsidiary of SAIPA to produce engines for the L90, Clio, Captur and Kwid models.
Earlier, Peyman Kargar, CEO of Renault Pars, had said the company plans to mass produce and export these models from Iran, counting it as a major export hub for the Middle East, Caucasus and Central Asian regions.
The company also produces the L90 jointly with Pars Khodro. It also plans to produce the Sandero, the Koleos and Duster with the same company inside Iran.
In 2004, Renault made the largest investment in Iran's auto industry since the Islamic Revolution in 1979. The company invested $1.5 billion in a joint platform. However, during the first term of Mahmoud Ahmadinejad's presidency, complications caused by the government of Iran at the time put an end to the project.
Despite all that and in spite of western sanctions on Iran over its nuclear energy program, Renault was the only French automotive company that never left the country and continued operation albeit on a smaller scale.
