Renault in talks to buy stake in Pars Khodro
France’s Renault is in discussions to buy a minority stake in Tehran-based Pars Khodro or infrastructure such as car plants from the Iranian carmaker’s parent company Saipa, a report says.
Pars Khodro was Renault's partner in a joint venture before the French carmaker slammed the door on the Iranian company in 2012 when sanctions were imposed on the Islamic Republic.
With the finalization of nuclear talks with Iran, French automakers are back with a vengeance in order to redeem the lost ground, mostly to Chinese companies.
According to Managing Director of Pars Khodro Naser Aghamohammadi, Renault intends to buy less than half of the shares in his company or manufacturing plants owned by Saipa.
Speaking on the sidelines of an Iran-EU trade and investment conference in Vienna, Aghamohammadi did not disclose the value of the transactions, the Wall Street Journal reported on its website.
However, Renault was first reported in January to be planning to use $562 million of funds stuck in Iranian banks under the sanctions to buy a 45% stake in Pars Khodro.
Western companies are salivating at the prospects of a pent-up demand in the Iranian market which produced 1.6 million cars before sanctions cut the output by 1 million units a year.
Iran is the Middle East's biggest car producer but the country’s automotive industry needs modernizing after years of sanctions.
Germany’s Volkswagen and Daimler have indicated their interest in returning to Iran, sending their executives to Tehran with Economy Minister Sigmar Gabriel last week.
French Foreign Minister Laurent Fabius plans visit to Tehran on Wednesday in order to revive relations. France's main business lobby group, the Medef, is also sending a delegation of about 80 firms to Iran at the end of September.
Another French auto giant Peugeot was among the first Western companies to re-establish commercial ties with Iran after the finalization of the nuclear talks. The company has said it planned to transfer technology and source parts for its new models of cars which it intends to build in Iran.
Iran was Peugeot's second biggest market by volume, accounting for about 13% of the French company’s annual sales which it halted after 23 years of partnership under US pressures.
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