A senior Russian official says the country’s largest carmaker AvtoVaz is negotiating the assembly and sale of its cars in Iran where there is massive pent-up demand for new automobiles.
"Negotiations are underway with a number of countries, such as Iran," Viktor Kladov, Director for International Cooperation and Regional Policy of Russian state conglomerate Rostec, was quoted as saying on Wednesday.
"I mean both the sales and the assembling," Russian TASS news agency quoted him as saying on the sidelines of the AERO INDIA 2019 exhibition.
AvtoVaz, majority-owned by France’s Renault and its alliance partner Nissan, produces Russia’s best-selling Lada brand.
Renault-Nissan has a 67.1 percent stake in the holding company that controls AvtoVAZ. The French company initially bought 25 percent of AvtoVaz in 2008 for $1 billion.
Nissan runs a plant with a capacity of 100,000 light vehicles a year in St Petersburg. PSA Peugeot Citroen, together with Mitsubishi, runs a plant in the region of Kaluga with a capacity of 125,000 cars a year.
Both Renault and its competitor Peugeot-Citroën put their development in Iran on hold after new US sanctions went into effect in August. Other Western firms, including German car and truck manufacturer Daimler, also dropped plans to expand their Iran business.
PSA had signed production deals worth 700 million euros, while Renault had announced a new plant investment to increase production capacity to 350,000 vehicles a year.
Earlier this month, Renault set a weaker full-year profit goal on the combined effect of withdrawal from Iran and setbacks over CEO Carlos Ghosn’s forced resignation last month over financial misconduct allegations.
There was no immediate reaction from either the French company or the Japanese automaker to Kladov’s announcement on Wednesday. Neither did the Russian official say whether Renault’s majority stake in AvtoVaz could affect plans in Iran.
Iranian vehicle manufacturer and dealer Iran Khodro was hoping to finalize a deal with Nissan for production of low-budget Datsun cars but the plan was apparently halted because of the US sanctions.
Peugeot manufacturer PSA and Renault moved swiftly to sign new production deals to upgrade their pre-sanctions partnerships in Iran after the West joined other countries to reach a nuclear deal with Tehran in 2015. President Donald Trump unilaterally withdrew the US from that deal in May and reimposed as sanctions on Tehran.