By on January 30, 2014

Iran Khodro Renault Production Line

After a six-month self-imposed hiatus, Renault has begun shipping “a very low volume” of parts overland to Iran for vehicle assembly.

According to Automotive News, over the past 10 days, parts for the Renault Tondar — the variant of the Dacia Logan built and sold by Iran Khodro — have made their way to Iranian production lines overland from Romania upon temporary easing of sanctions against the Iranian government for their nuclear ambitions. The lifting of sanctions is currently expected to last six months after Tehran pledged to freeze key components of their nuclear program, with talks due next month to work out a permanent deal to wind down sanctions in exchange for curbs in Iran’s aforementioned program.

For Renault and their rivals in Peugeot/PSA, the six-month window is crucial in rebuilding their relationships with their partners in Iran Khodro and Pars Khodro, as well as regaining their foothold on the Persian auto market before more players — such as General Motors — enter the room.

According to Renault’s Asia-Pacific boss Giles Normand, the window marks an opportunity to “gradually restart the supply of parts for vehicle production as well as flow of payments,” noting that the current state of things “must be allowed to improve visibly in Iran” lest their customers feel their country has been short-changed through a lack of visible change.

Total production of vehicles in Iran peaked at 1.6 million units in 2011, the year the sanctions were imposed. Renault lost 64,500 deliveries as a result in 2013, marginally dampening global growth to 2.63 million units overall. With the possibility of 1 million to 1.5 million annual sales at stake, Renault nor PSA can afford another setback.

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