The Renault partnership in Russia changes the investment location in Iran

Asrekhodro- In spite of rest of the world, In Iran, geographical and geopolitical predominance of areas are less considered in Industrial development plans. Connection of production zones to potential export markets and inherent production and logistic superiorities are important factors to enhance economic development of projects. Unfortunately, consciously or not, in many macroeconomic plans, the political relation is dominated to expert studies and selected location mainly effected by political pressure in government or other officials.

Saturday 11 November 2017 - 07:39:00

The Renault partnership in Russia changes the investment location in Iran

Reporting "Asre Khodro", such intended inaccuracy somehow mislead the foreign investors in the few implemented joint venture projects, inattention to the international markets, caused discontinuity in international supply chain of foreign investor, so production was limited on domestic scale then circumscribed value added of investing restrictedly.
Hearings indicate Saipa's rebellion in handing over of Bonro (one of the Saipa’s subsidiaries) to the Renault-IDRO joint venture, which has forced them to investigate potential locations for their independent plant.
These studies are mostly biased by the information provided by the Iranian partner inattention to the Renault global chain, then the candidates for the independent plant of Renault may have limited real value added. Meanwhile, Renault’s presence and problems in the Russian and the Commonwealth of Independent States (CIS) markets are highly neglected.
Renault started to implement a long-term program in Russia since 2008 by investing and taking over 25% share of Avtovaz, manufacturer of Lada in Russia. During past ten years, Renault has continuously increased investing in this automaker and since past two years Renault has taken complete control of it.
A comprehensive expansion plan based on low cost platform of Renault implemented that relatively welcomed by market.
Reaching to nearly half a million vehicles production annually is one of Renault's key achievements by this plan, although connecting to half a billion population of CIS countries and growing Eastern European market promising higher potentials for both Iran and Russian Expansion plans of Renault.
Planned products for Iran factory and Avtovaz have lots of technical commonalities, beside usual obstacles in part supply and high logistics costs in Russia can be an exceptional opportunity for partnership in Iran.
Higher production rate in common parts to be supplied to Renault's factories in Iran and Russia will economize future investments by Iranian part manufacturers and manage logistics costs of parts supply in Russia.
Considering above and the ambitious plans of Renault in Iran and Russia, importance of geographic location of the Renault base in Iran will be highlighted.
In fact, the GILAN province and the areas close to ANZALI free zone and port have a unique inherent potential for hosting this joint venture. The connection of Iran and Russia through the Caspian Sea is a cheap, fast and reliable way. At the same time, the Caspian Sea is hosting more than 5 countries, which facilitates direct export to these regions. Mild climates, available educated manpower beside of excellency of free zones advantages in industrial investment will provide an exceptional opportunity for Renault-IDRO joint investment that render a considerable real value added for partners and rest of country.


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RenaultIran automotive marketSaipa
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