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IRAN: IKCO holds out hope for more foreign partners as new President elected

By Simon Warburton | 7 August 2013

Iran Khodro (IKCO) says it is hopeful Iran's recent election of a new President will allow more partners - as well as its old Renault and Peugeot business allies - to have full operations in the country.

Crippling sanctions - to which the new President Hassan Rouhani made reference in his first press conference yesterday (6 August) - have led Renault and PSA to suspend operations in Iran - but IKCO remains optimistic the situation can improve.

"There is a hopeful environment - everybody knows this will be a new prospect - especially the car industry," an IKCO spokesman told just-auto from Tehran. "We have seen some foreign partners present in Iran, kind of suspended, but everybody here is very hopeful the new government and new environment will be started.

"So foreign partners will come to talk to IKCO - more than Peugeot and Renault - after the new environment new foreign partners come to negotiate with Iran."

The issue of partnership was complicated recently by US President Barack Obama's Executive Order clamping down on automotive business in Iran, targeting the supply of complete knock down (CKD) kits.

Obama's Order says the export of finished vehicles to Iran is not sanctionable, but CKD kits exported to the country for assembly would be considered as goods and services used in connection with the automotive sector and would be sanctionable if the business was significant.

"The new government has a new policy - especially in the car industry," said the IKCO spokesman. "The new policy is to attract new foreign partners and investors in Iran because the new government believes in the free market."

French automotive involvement with Iran - as well as that of several other western car manufacturers in the country - has been a hugely sensitive issue given the draconian sanctions regime that aims to dissuade Tehran from developing what some maintain is its proposed enrichment of uranium for nuclear weapons.

"It is a pause for the moment - we don't produce any more but that does not mean everything is definitively stopped," a Renault spokesman told just-auto from Paris. "We are waiting overall with the election of the new President.

"If these relations go towards a sort of understanding between the two countries [France and Iran], it is clear [for] Renault, like other French businesses, the situation could be more simple, but at the base it is a political situation."