How Iran’s Auto Industry became a Political Football

Another concern among parliament members was the direct involvement of Nematzadeh’s ministry in the car market. The Industrial Development and Renovation Organization (IDRO), under the ministry’s purview, had struck a deal with Renault on Oct. 9. On the sidelines of the signing ceremony, Nematzadeh tried to justify the deal, saying that his ministry seeks to attract foreign investment in the automotive sector to upgrade manufacturing technology and provide Iranians with high-quality cars at competitive prices.

He called Renault an “appropriate partner” that could can help Iran finish a key automotive development project given the company’s 12-year presence in Iran.

Some parliament members appear not to have been persuaded, however, as they argued that the private sector, not IDRO, should have partnered with Renault. Parliamentary committee spokesman Saeed Bastani told the Fars News Agency on Oct. 26 that in response to this assertion, Nematzadeh had apparently said that private manufacturers had refused to cooperate with the French company.

Members of parliament called on Nematzadeh to obtain a guarantee from French automakers, including Renault, Peugeot and Citroen, that they will not repeat their “wrong behavior” of the past, Bastani said, referring to how Renault and Peugeot had pulled out of Iran in 2012 when economic sanctions intensified.

A German business consultant who counsels a number of European and Asian carmakers operating in Iran told Al-Monitor that such guarantees are difficult to come by. “It doesn’t matter what type of contract you sign with a foreign company. If Iran comes under the same serious sanctions as before in the future, none of the European automakers will stay in the market,” the consultant said on condition of anonymity during a business trip to Tehran.

No comments yet.

Leave a Reply