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Renault signs deal to create Iranian JV

On March 16, 2004, Renault, IDRO, Iran Khodro and Saipa signed the initial terms of their agreement for the creation, as of April 2004, of Renault Pars, a joint venture company, with 51% to be held by Renault and 49% by the Iranian company, AID co.

Car manufacturers Iran Khodro and Saipa will produce and market the 'X90' vehicle in Iran as of 2006. The project will be coordinated by Renault Pars. The initial installed capacity of the two manufacturers will be 150,000 units each.

.Renault Pars will be held 51% by Renault and 49% by AID co, a common entity comprised of IDRO and the two major Iranian car manufacturers, Iran Khodro and Saipa. It will be established next month.

Iran has a population of 68 million and its automotive market has experienced strong growth over the past three years. In 2003, almost 700,000 vehicles were sold. The X90 was designed with Renault's Romanian subsidiary for developing country markets.

Peugeot has been the previous major inward investor in Iran, where the most populous car has long been the Talbot –Chrysler Avenger-based Peykan. US firms are discourage from investment in Iran by its presence in the list of 'Axis of Evil' states and anxieties about its partly-concealed nuclear capabilities.

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