Groupe Renault has signed a joint venture agreement with the Industrial Development & Renovation Organization of Iran (IDRO) and Parto Negin Naseh Co, an importer of Renault products in Iran, to set up a new vehicles factory in Iran.

The plant, with an initial production capacity of 150,000 vehicles a year, will supplement Groupe Renault’s existing capacity of 200,000 vehicles a year in the country. The first vehicles to be produced at the plant will be new Symbol and new Duster.

“We pursue promotion of domestically made products through joint venture with international brands,” Mansour Moazami, head of Iran’s IDRO was quoted as saying by Irna. “Up to 66 million euro ($78 million) will be invested at the first phase of the project,” he added.

Based on the contract, Renault will sponsor the project in all phases, including investment, technology transfer, engineering and export, executive vice president and chief competitive officer in Renault Group Thierry Bolloré said.

The proposed joint venture company, of which Renault will be the majority shareholder, will include an engineering and purchasing centre to support the development of local suppliers as well.

An engine plant is also planned with a capacity of 150,000 units a year. The manufacturing facilities will be in Saveh, located 120 km from Tehran. They will be owned and operated by the joint venture company. The agreements also provide for the development of an exclusive Renault distribution network, in addition to the existing network of Negin Khodro.

“We are happy to sign this agreement with IDRO and Parto Negin Naseh Co. In a rapidly expanding Iranian market, it was vital to implement plants, engineering and purchasing centre. This joint venture will enable an acceleration of our growth in this country,” said Thierry Bollore, member of Groupe Renault executive committee and chief competitive officer.

“The development of a commercial network specific to our brand will reinforce Groupe Renault’s position in Iran. The signing of this new joint venture reinforces the strategic choices we have made in Iran and will open new perspectives in a 2 million vehicle market projected in 2020,” said Stefan Mueller, member of Groupe Renault executive committee and chief performance officer.

“Our group as the owner of the Negin Khodro Co, the existing establishment for Renault Network in Iran, is proud to be part of this industrial development,”said Naser Haddadzadeh, chairman of the Negin Holding.