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Rouhani sees ‘important’ deals in France

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
President Rouhani is seen off by his cabinet members at Mehrabad Airport on his visit to Europe. ©IRNA

Peugeot and Renault are set to benefit the most from President Hassan Rouhani’s landmark visit to Paris where the French automakers hope to sign new deals for a return to Iran.

Rouhani said Iranian companies will sign “important contracts” on the visit, mentioning Peugeot and Renault, as he started his visit to Italy and France on Monday.

Ministers of petroleum, transport, industry and health are tagging along with the president in a large delegation of 100 political and economic officials.

Iran Civil Aviation Organization (CAO) will sign a contract to buy 114 passenger planes from Airbus during the visit, Minister of Transportation Abbas Akhoundi said. 

"We need to modernize our aviation fleet and buy locomotives," Rouhani told reporters at Mehrabad Airport before leaving Tehran.

However, Peugeot and Renault are facing a bumpy road for a return to Iran amid calls to hold the two automakers to account over their abrupt pullout from the country in 2012 when sanctions were imposed on Tehran.

On Sunday, an unnamed auto industry official said Iran Khodro and Peugeot will likely finalize a deal for 500 million euros of joint investment in Iran during Rouhani’s visit.

Under the 50-50 joint venture, they will produce Peugeot 2008 crossover, 208 supermini and 301 compact cars in Iran, the Tasnim news agency quoted the official as saying.

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.

Renault has been reported to be angling for a minority stake in Tehran-based Pars Khodro or infrastructure such as car plants from the Iranian carmaker’s parent company Saipa.

Pars Khodro was Renault's partner in a joint venture before the French carmaker slammed the door in the Iranian company's face in 2012 when sanctions were imposed on the Islamic Republic.

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.

The carmaker Renault reportedly plans to use $562 million of funds stuck in Iranian banks under the sanctions to buy a 45% stake in Pars Khodro. 

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