Renault agrees to step up car production in Iran

Renault's Thierry Bollore shook hands on the deal with Iranian representatives

French car firm Renault has agreed to step up production in Iran, at a refurbished factory which eventually will produce 300,000 cars each year.

The deal is a joint venture with the Iranian government and a private firm called Parto Negin Naseh, although Renault will have a 60% stake.

The revamped factory will be at Saveh, 74 miles south-west of Tehran.

"We are happy to sign one of Renault's most historical contracts here," said Thierry Bollore of Renault.

Mansour Moazami, head of Iran's Industrial Development and Renovation Organisation (IDRO), said the first phase of the agreement would lead to 150,000 cars a year being produced within 18 months.

Production, initially of its Duster and Symbol vehicles, will then be ramped up to 300,000 cars per year by 2022.

Renault already makes about 200,000 cars per year in Iran, where it has been producing vehicles since 2004, side-stepping international trade and financial sanctions against the country.

Those were imposed by the European Union in 2012 because of Iran's continued development of facilities to enrich uranium which might be used in nuclear bombs and missiles.

The sanctions were eased last year, paving the way for the new deal.

"This signing confirms our strong intent and commitment for long-term operations as a strategic partner of Iran's automotive industry," said Mr Bollore.

The IDRO will own 20% of the new venture and Parto Negin Naseh will hold the other 20%.

One element of the deal is that 30% of the cars and parts will go for export.