French carmaker Renault seeks return to Iranian market

French auto manufacturer Renault S.A. seeks to return to the Iranian market after leaving Iran due to US-engineered sanctions imposed on the Islamic Republic over its nuclear energy program.

A Renault spokesperson, speaking on condition of anonymity, said Tuesday that the automaker is waiting for the sanctions to be lifted or for the political situation to change before resuming shipping completely knocked down (CKD) kits to Iran again.

On July 1, Renault was forced to halt CKD shipments to Iran when the US government extended economic sanctions over the country’s nuclear energy program to the automobile sector.

Renault is one of the major European companies active in Iran and its withdrawal from the country is a blow to the French automaker. Renault builds Logan, badged as Tondar-90 in Iran, and Megane sedans in conjunction with Tehran-based automakers Iran Khodro Company (IKCO) and Pars Khodro.

On July 26, Renault reported a huge fall in profits for the first half of 2013 after writing off the entire value of its business in Iran.

Net income for the six months to June fell 87 percent to 97 million euros (over USD 128 million), down from 774 million euros (USD 1.02 billion) a year earlier, the carmaker said in a statement.

The firm took a 512-million-euro (680-million-dollar) charge after halting its activities in Iran because of US-led economic sanctions against Islamic Republic.

Last year, Renault sold a total of 100,783 vehicles in Iran, and had a 10-percent market share. The Middle Eastern country was Renault’s eighth-biggest global market by sales, above Italy where Renault sold 96,144 units and Spain where it sold 83,366 cars.

The illegal US-engineered sanctions against Iran were imposed based on the unfounded accusation that the Islamic Republic is pursuing non-civilian objectives in its nuclear energy program.

Iran rejects the allegation, arguing that as a committed signatory to the Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it has the right to use nuclear technology for peaceful purposes.

In addition, the IAEA has conducted numerous inspections of Iran’s nuclear facilities but has never found any evidence showing that the Iranian nuclear program has been diverted toward military objectives.