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Renault’s investment in Iran’s car market threatens Peugeot

15 August 2017 [17:48] - TODAY.AZ
By  Trend

While Iran’s recent joint venture agreement with Renault has boosted hopes for the country’s economy, Professor David Bailey suggests that the accord would threaten French carmaker’s rivals in the Middle Eastern country.

"Other carmakers will be looking to enter the fast growing Iranian car market and look to invest in the country, such as Volkswagen and Peugeot. The latter specifically is threatened by the Renault investment," Aston Business School Professor David Bailey told Trend.

Industrial Development and Renovation Organization of Iran (IDRO) cemented €660 million deal with French automaker Renault on August 7.

"There will be local content restrictions on the Renault investment so I expect to see supply chain investment in Iran from major international manufacturers to supply components," David Bailey who is known as an influential business expert on economic restructuring and industrial policy said.

Secretary of the Iranian Automotive Parts Manufacturers Association Mohammad Reza Najafi-Manesh earlier told Trend that cooperation between Iranian and European auto parts manufacturers and suppliers would lead to the transfer of the technical know-how to his country.

Reza Najafi-Manesh said that, currently in Iran at least 50 car parts manufacturing joint ventures have been organized in collaboration with international partners. He elaborated, outlining German Robert Bosch and Continental as two of the most outstanding foreign car parts manufacturers and suppliers having established several joint ventures in the Islamic Republic.

Renault sales in Iran’s car market registered a huge rise by 100.3 percent in the first half of 2017, increasing its share from the country’s car market to 9.8 percent.

Last year, French carmaker PSA Peugeot Citroen also inked a deal to launch a plant producing 200,000 vehicles annually in Iran. Peugeot was among the major players in Iran's car market before international sanctions were imposed.

Back in January, PSA Group announced that its global sales in 2016 increased by 5.8 percent, to 3.146 million units including 233,000 vehicles produced in the Islamic Republic under the French carmaker’s license.


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