Renault SA is shaping up to be the latest European company to fall victim to US President Donald Trump’s renewed sanctions on Iran, as the automaker has raised the possibility of pulling out of Iran for fear of US sanctions.
Iran operations are likely to be put on hold to comply with US sanctions, Renault Chief Operating Officer Thierry Bollore told analysts during a conference call about earnings Friday.
“We are looking to new business opportunities, particularly in Africa, with strong growth to offset the missed opportunities in Iran,” Bloomberg quoted him as saying.
Since the anti-Iran sanctions were eased in 2016 under the Joint Comprehensive Plan of Action (JCPOA), Iran emerged as a hot spot for growth, and trade with Europe surged to more than $10 billion. Now that the US has withdrawn from the Iran nuclear deal and re-imposed trade curbs, companies are rushing back out.
Renault’s French rival, PSA Group, which makes Peugeot and Citroen cars, also suspended its push in Iran. French energy companies Total SA and Engie SA are also heading to a pullout, along with other European industrial giants including Germany’s Siemens AG, which agreed to supply turbines to the country, or plane-maker Airbus SE, which had won an order for 100 planes. Payments processor Ingenico Group SA said this week it’s phasing out its activities in Iran.
Renault signed an agreement last year with Iran’s Industrial Development and Renovation Organization and local dealer Parto Negin Naseh Co. to boost its local production by 75 percent. The company hadn’t yet started manufacturing vehicles or making investments under the deal, according to Chief Financial Officer Clotilde Delbos, but has been producing cars there since 2003 with two other partners.
The US administration this month rejected France’s demands for a waiver or exemption for companies seeking to do business in Iran. Even companies with no business ties to the US find it difficult to operate in Iran because banks are reluctant to finance Iranian operations.
(Source: Tasnim, under Creative Commons licence)