Theodore's World: Iran Suspends Renault Car Project

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April 19, 2006

Iran Suspends Renault Car Project

TEHRAN, April 18 (Reuters) - Iran has suspended a joint venture project to produce the L90 or Logan car with French automaker Renault in the Islamic republic, a government official said on Tuesday.

Analysts said the move would be a further blow to foreign investment in Iran, seen as crucial for creating jobs for the country's young population. It also comes at a time of increasing international tension over Iran's nuclear programme.

A dispute over exports of the no frills car appears to be at the heart of the dispute.

"Iran's industry and mines minister has ordered the suspension of the L90 project until Renault company considers this ministry's views regarding the project," said Mohammad Karimi, a spokesman for the ministry.

An official for the L90 project in Iran said that Renault had accepted that 60 percent of the car should be built inside Iran, the car's platform could be used to build other models and that the L90 would not enjoy a monopoly in its class of car in Iran.

But he said: "the main problem remains where Iran wants to have a share of this company's (Logan) exports".

Renault has said it had set up a joint venture with an Iranian partner to produce the L90 in Iran from 2006. The L90 is better known as the "Logan", a car that Renault already produces in Romania.

"It is a very bad sign to the world community. It shows they can't trust us again," Leylaz said, adding that it will also have a major impact on the local car parts industry.

He said that the joint venture company had signed contracts worth about $800 million with local firms to supply parts. These contracts were now being threatened, he added.

Leylaz pointed to a previous dispute in which Iran threw out a Turkish operator of a project to run a new Iranian airport, saying it had already damaged Iran's international commercial reputation.

"In this case, we are losing our internal reputation because hundreds of suppliers are involved in this project," he said.

Posted by Wild Thing at April 19, 2006 01:09 AM


Good, more fuel for internal strife as the mullahs and radicals stab themselves in the back. I still have a faint hope there will be another revolution in Iran.

Posted by: TomR at April 19, 2006 06:48 AM

One way to slow down military maneuvers in Iran is to fill the roads with Renaults. A French-built automobile is a perfect stationary dumpster or garbage incinerator. An Iranian-built French-designed vehicle is beyond parody.

Posted by: Rhod at April 19, 2006 06:50 AM

Tom,yes, there is always a chance that could happen.

Posted by: Wild Thing at April 19, 2006 09:21 AM

Rhod.........."An Iranian-built French-designed vehicle is beyond parody."

Hahahahahahaa TRUE!

Posted by: Wild Thing at April 19, 2006 09:22 AM

LOL Rhod.

Very interesting indeed. Cripple your own industries, based on greed and paranoia. This reminds me of the former Soviet Union's military spending, causing shortages of food, fuel, employment, even toilet paper. It appears that Iran is heading in the same direction. TomR makes an excellent point, once down this road it can spiral out of control of the folks in charge. I hope that happens.

Posted by: RightToCarry at April 19, 2006 07:09 PM

Part of the dispute was over "export" of the Logan Car. Export? To whom? To where? Recall that the Soviets produced the Lada for years, which was an already obsolete version of a Fiat model, and the Trabant, which was on the same platform if I recall. They were both junk; no one wanted them. The Soviets hadn't even a primitive understanding of marketing.

Successful automobiles depend upon the manufacturer's perception and concern for the end user, a parts network, international cooperation, and a host of other mechanisms that the Iranians completely lack. These shi*heads couldn't produce a desirable consumer product because they're more interested in killing than producing. What a joke.

Posted by: Rhod at April 19, 2006 09:03 PM