Renault’s Iran market looks promising: ex-official
Tehran, Iran, June 16
By Mehdi Sepahvand - Trend:
The French carmaker Renault is most probably going to have a bright future in the Iranian market, being capable of taking over as much as one third of it, Babak Moghaddam, former Renault Middle East distribution manager told Trend June 16.
“Renault’s game in Iran is complex in CKD (completely knocked down) works with multi partners like IKCO (Iran Khodro) and Saipa. But as of now, Renault is going to build its own factory to produce Renault cars in Iran and at the same time it is working on CBU (completely built up) with Negin Khodro,” Moghaddam said.
“So in terms of products, I believe the Renault basket is quite good for Iran’s future market, especially in CKD with KWID (model), and in CBU with flagship products like XZG (New Koleos) and LFD (Talisman), so Renault has good players in the field.”
However, he said that there are some weaknesses regarding the strategy.
“Playing such a complex game with multi partners is not so easy. Plus, when a foreign company wants to start its own production and own network, the resistance is a lot higher,” he said.
So if Renault will be able to set up a good strategy and policy with partners, then they will be capable to get around 35-40 percent of the market in the next 5 years, Moghaddam concluded.
Under a recent agreement between Iran and Renault, a new automotive engineering center will be launched in the country to help domestic spare car part makers.
In the meantime, Renault will operate a plant with an initial capacity for producing 150,000 cars in the Islamic Republic.
Renault takes a 60 percent share in the partnership, investing about $300 million at the first phase. While Renault is obliged to design and produce engines as well as gearboxes in Iran, the agreement envisages exporting 30 percent of its products.
In case the sides succeed in realizing the plan, a third player will enter the country’s car market captured by the state-backed carmakers, Iran Khodro and SAIPA.
The 2016 sales of Renault in Iran skyrocketed by 110.7 percent to give the French carmaker an 8.4 percent market share.