Renault resumes Iran shipments for car production

01 February 2014 | 21:35 Code : 1928173 Latest Headlines

(Reuters) - Renault has resumed shipments to Iran and expects its car production in the country to pick up progressively throughout the first half of 2014, the French automaker said.

A temporary easing of sanctions has begun to allow a "very low" volume of parts shipments for vehicle assembly in Iran, Renault's regional boss Gilles Normand told Reuters in an interview late on Tuesday.

"The important thing is that we can gradually restart the supply of parts for vehicle production as well as the flow of payments," said Normand, head of the carmaker's Asia-Pacific operations, which include the Middle East.

"There's a window of opportunity for the next six months."

Overland shipments of parts for the Tondar model, an Iranian version of Renault's low-cost Logan car, have been leaving from Romania in the last 10 days after a six-month hiatus caused by last year's further tightening of sanctions.

Production by Iran's domestic car industry, unusually developed for the Middle East, peaked at 1.6 million cars in 2011, the year crippling new sanctions were introduced.

Renault and French rival PSA Peugeot Citroen are keen to resume Iranian vehicle assembly and sales with local partners Iran Khodro and Pars Khodro, to rebuild the significant market position they enjoyed before sanctions were tightened.

In return for Tehran's pledge to freeze key parts of its nuclear programme, the so-called P5+1 powers agreed in November to a six-month lifting of sanctions on selected goods including car parts. The easing is only now beginning to take effect.

"If Iranian consumers see no change, they will think the country has been short-changed," the Renault executive said.

"So I think it's understood that things must be allowed to improve visibly in Iran - and that's where the government will get a legitimate mandate to reach a (final) deal."

International talks are expected to begin next month in New York on a permanent deal to wind down sanctions in return for curbs on Iran's nuclear programme.