Iran and French automaker Renault signed a final joint-venture agreement in Tehran on Wednesday, clearing the path for mass production of the budget-oriented Logan sedan in the Islamic Republic.
The deal had stalled since April, when Iran demanded that at least 20 percent of Logan vehicles assembled domestically be exported to Renault's established markets. The signed agreement satisfies that condition, with Renault's Iranian subsidiary, Renault Pars, committing to export no less than that share of local output.
Industry Minister Ali Reza Tahmasebi said production would begin in September at a base price of 6,750 euros per vehicle. The agreement also stipulates that at least half of all components be manufactured inside Iran.
The venture, structured between Renault Pars and the Automotive Industry Development Co. (which oversees state carmakers Saipa and Iran Khodro), traces its origins to a 2004 agreement. Valued at hundreds of millions of dollars, it represents the largest sustained French direct investment in Iran since the 1979 revolution.
Analysts had cautioned that a Renault withdrawal would have discouraged other foreign investors already wary of US sanctions and tensions surrounding Iran's nuclear program.
Historical summary. TurkishPress restated this wire report, first published in May 2006, in its own words.