Renault-Iran project back on track after row

24th May 2006, Comments 0 comments

TEHRAN, May 24, 2006 (AFP) - Iran and French auto giant Renault put their joint venture back on track on Wednesday by signing a final contract that paves the way for the manufacture of a no-frills car for the Islamic republic.

TEHRAN, May 24, 2006 (AFP) - Iran and French auto giant Renault put their joint venture back on track on Wednesday by signing a final contract that paves the way for the manufacture of a no-frills car for the Islamic republic.

The landmark deal had been suspended since April, when Iran insisted the plan would go ahead only if it could export some 20 percent of the L-90 'Logan' mass-market cars to the French manufacturer's traditional markets.

A joint statement issued at the signing ceremony said Renault Pars, the car giant's Iranian unit, had "agreed to export 20 percent of the cars made in Iran".

Renault struck a deal with Tehran in 2004 to produce the Logan as part of the joint venture of Renault Pars and the Automotive Industry Development Co, which groups Iran's two main state-controlled carmakers, Saipa and Iran Khodro.

The joint venture, worth at least EUR 300 million, is the largest direct and long-term investment in Iran by a French firm since the 1979 Islamic revolution.

L-90 production is scheduled to start later this year.

Analysts have been closely watching the wrangling over the deal, warning that a Renault pullout would be bad news for foreign investors eyeing up Iran's tightly-protected market.

Many investors are already put off by US sanctions and mounting tensions over Iran's disputed nuclear programme.

Copyright AFP

Subject: French news

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