French carmaker Renault eyes re-entering Iran car market

French vehicle manufacturer Renault is seeking to re-enter the Iranian market as soon as the sanctions against the Islamic Republic ease in the wake of the implementation of a landmark deal between Iran and six other countries.

“We consider that this is a potentially great market for the car industry and we want to be able to launch again the operation immediately when the sanctions are lifted,” Renault Chief Executive Carlos Ghosn told Reuters on Thursday on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland.

He added, “Ourselves and a lot of car manufacturers would love to contribute to the development of the Iranian market, which is already the largest market in the Middle East despite the sanctions.”

On July 1, 2013, Renault was forced to halt completely knocked down (CKD) shipments to Iran when the US government extended economic sanctions against the Islamic Republic to the automobile sector.

On July 26 of the same year, Renault reported a huge fall in profits for the first half of 2013 after writing off the entire value of its business in Iran. The firm suffered a loss of 512-million-euro (680-million-dollar) after halting its activities in the Islamic Republic.

In 2012, Renault sold a total of 100,783 vehicles in Iran, and had a 10-percent market share. The Islamic Republic was Renault’s eighth-biggest global market by sales, above Italy and Spain.

On January 12, Iran and the five permanent members of the United Nations Security Council – Russia, China, France, Britain, and the US – plus Germany finalized an agreement on ways to implement the interim nuclear deal that the two sides struck in Geneva on November 24, 2013. The interim accord, which went into effect on January 20, is aimed at setting the stage for the full resolution of the decade-old standoff over the Islamic Republic’s nuclear energy program.

Under the Geneva nuclear deal, Iran as a confidence-building measure agreed to limit certain aspects of its nuclear activities and the sextet undertook to provide Iran with some sanctions relief such as lifting the EU and US sanctions on Iran’s petrochemical export, gold and precious metals and auto industry as well as suspending the supply of spare parts for the Iranian airplanes.