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Renault

Renault

Industry: 
Automotive
Symbol: 
EPA:RNO
States: 
NY
Country: 
France
Sources: 

French automaker Renault is looking for a financial partner to resume full operations in Iran and is in talks with the U.S. and French governments on the issue, one of its senior executives said. Renault is keen to resume Iranian vehicle assembly and sales with local partners Iran Khodro and Pars Khodro, to rebuild the significant market position it enjoyed before international sanctions on Tehran were introduced in 2011. 'What we are looking for is a financial partner, who will on their own as well comply with all the international regulations and which enable us to resume our activities in Iran,' Chief Performance Officer Jerome Stoll said in an interview with news agencies late on Wednesday. 'We are just trying to explain our position to the American administration, French administration as well. To explain what we want to do, how we want to proceed and how we want to make this business,' he said. He added that the company had been approached by Turkish banks and international banks. (Reuters, UPDATE 2-Renault seeks financial partner to resume business in Iran, 6/19/14)

 

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"French carmaker Renault sold 3,280 vehicles in Iranian market in May. The figure shows a 52 percent increase compared to April, Iran's Tasnim News Agency reported on June 18... The French company sold 2,150 vehicles in Iranian market in April.French carmakers Peugeot and Renault look to be among the clearest beneficiaries of the interim deal that lifts some sanctions on Iran, with both hoping to leap back into the Middle East's biggest auto market, AFP reported in November." (Trend, "French carmaker Renault sells over 3,000 vehicles in Iran in May," 6/18/14)

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“Renault says it is ‘closely monitoring’ the diplomatic situation concerning Iran as automakers and suppliers start to take advantage of the slight relaxation in sanctions against Tehran…In January, the French automaker said sanctions had cost it 64,500 models, but the thaw in relations could see it up shipments to Iran later this year, with Renault regional chief, Gilles Normand, noting the next few months presented an opportunity for component exports for assembly, while also making reference to the importance of finance flow. ‘Since the Geneva agreements in November, the embargo has been partially suspended,’ a Renault spokeswoman in Paris told just-auto. ‘It has not been lifted yet. We are waiting and are closely monitoring the diplomatic situation there and we hope it will be resolved any time soon. Iran is a really important market and if the embargo is lifted eventually and also the financial situation is resolved - this is what our management - especially [CEO] Carlos Ghosn has been repeating regarding the situation these past few months.’ Renault has business with both major Iranian automakers, Iran Khodro and SAIPA and started shipping components for Tondar (Dacia) models at the beginning of the year. The Tondar90 is a version of the first generation Dacia/Renault Logan built by both IKCO and SAIPA. Some estimates have put the benefits to the automotive industry of the limited sanctions relaxation at up to US$500m. Paris business association, MEDEF, recently took a delegation to Tehran, while French supplier body, FIEV, attended an automotive conference in the Iranian capital, bringing with it 16 domestic component producers.” (Just Auto, “IRAN: Renault monitors diplomacy as sanctions ease,” 4/15/14)

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“Multiple companies currently exploring new business ventures in Iran are also cashing in on highly lucrative contracts with the U.S. Defense Department, raising questions about whether their dealings with Iran could run afoul of U.S. law. At least 13 major international companies have said in recent weeks that they aim to reenter the Iranian marketplace over the next several months. The companies have received Pentagon contracts totaling well over $107 billion, according to a Washington Free Beacon analysis that tracked DoD contracts awarded since fiscal year 2009. Many of the companies, which include carmaker Renault and oil giants such as BP, have already sent high-level trade delegations to Tehran to meet with Iranian officials about striking new business deals…Renault, for instance, resumed shipping car parts to Iran in January of this year. The French automaker has received at least $111,170 from the Pentagon, according to publicly available data. BP representatives reportedly attended an Iran oil investor conference that included Iranian President Hassan Rouhani and the country’s oil minister.” (Washington Free Beacon, “Pentagon Contractors Exploring Business with Iran,” 2/25/14)

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“Hundreds of Iran’s 2,000 or so car part producers have gone bankrupt or switched to other areas of manufacturing and thousands of workers have been laid off in the past two years amid crippling sanctions imposed over the country’s nuclear programme. The sanctions caused a sharp drop in imports and led PSA Peugeot Citroën and Renault, the French car producers on which Iran’s car industry was dependent, to all but abandon the Iranian market…Renault, which was selling nearly 100,000 cars a year in Iran before sanctions came into force, was quick to resume shipments once the relaxation of sanctions came into effect. This has already led to a rise in daily production. Its rival Peugeot, which sold 458,000 cars in Iran in 2011 – nearly a third of the total market – is also poised to return to the country, which was once its second largest market after France. The new developments ‘have definitely energised the car production sector,’ said Mohammad-Reza Najafimanesh, a member of the Tehran House of Industries and Mines, a non-governmental body.” (Financial Times, “Iran’s automobile sector faces slow revival after sanctions lifted,” 2/24/14)

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“Iran [welcomes] the most senior French trade delegation in years on Monday, telling more than 100 executives that the farsighted among them stood to win the race for business following an easing of some economic sanctions…’A new chapter has begun in relations between Iran and Europe,’ Mohammad Nahavandian, President Hassan Rouhani's chief of staff, was quoted as saying by the official IRNA news agency. ‘You should carry the message back that potential for cooperation with Iran is real and not to be overlooked,’ he told the delegation. ‘Those with longer foresight stand to win this race.’ The delegation of more than 100 executives from Medef, the French employers' association, on a Feb 2-5 trip, met Nahavandian and members of Iran's Chamber of Commerce, Industries, Mines and Agriculture, IRNA said. A source close to the delegation told Reuters it was the most senior group of entrepreneurs and financiers to visit Iran since the 1979 revolution, representing the defence, aviation, petrochemicals, automotive, shipping and cosmetics sectors. Among companies represented were Safran, Airbus , Total, GDF-Suez, Renault, Alcatel, Alstom, Amundi and L'Oréal, the source said. ‘Many of these firms have worked in Iran before and their goal now is to restore links,’ the source said. ‘The very makeup of the delegation shows these people are here to evaluate potential for cooperation.’ A French embassy source in Tehran said the visit was merely exploratory and ‘nothing is to be signed this time around.’” (Reuters, “Iran welcomes French business chiefs after sanctions eased,” 2/3/14)

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“Renault has resumed shipments to Iran and expects its car production in the country to pick up progressively throughout the first half of 2014, the French automaker said. A temporary easing of sanctions has begun to allow a 'very low' volume of parts shipments for vehicle assembly in Iran, Renault's regional boss Gilles Normand told Reuters in an interview late on Tuesday. 'The important thing is that we can gradually restart the supply of parts for vehicle production as well as the flow of payments,’ said Normand, head of the carmaker's Asia-Pacific operations, which include the Middle East. 'There's a window of opportunity for the next six months.’ Overland shipments of parts for the Tondar model, an Iranian version of Renault's low-cost Logan car, have been leaving from Romania in the last 10 days after a six-month hiatus caused by last year's further tightening of sanctions. Production by Iran's domestic car industry, unusually developed for the Middle East, peaked at 1.6 million cars in 2011, the year crippling new sanctions were introduced…’If Iranian consumers see no change, they will think the country has been short-changed,’ the Renault executive said. ’So I think it's understood that things must be allowed to improve visibly in Iran - and that's where the government will get a legitimate mandate to reach a (final) deal.’” (Reuters, “Renault resumes Iran shipments for car production,” 1/29/14)

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“French carmaker Renault aims to get back into Iran as soon as sanctions are lifted, chief executive Carlos Ghosn said on Thursday, describing it as ‘a potentially great market’…Many Western firms have been anticipating a return to Iran following a deal in November over the country's nuclear programme, which Western countries suspect is aimed at developing arms despite Iranian denials. Some sanctions are now being eased but most remain pending a long-term agreement. ’We consider that this is a potentially great market for the car industry and we want to be able to launch again the operation immediately when the sanctions are lifted,’ Ghosn told Reuters TV on the sidelines of the World Economic Forum in Davos. 'Ourselves and a lot of car manufacturers would love to contribute to the development of the Iranian market, which is already the largest market in the Middle East despite the sanctions.’” (Reuters, “Renault aims to go back to Iran as soon as possible,” 1/23/14)

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“Renault said its vehicle sales rose 3.1 percent in 2013 and pledged further growth this year after its low-cost cars helped the company defy a European slump and gain ground in Russia and emerging markets…But western sanctions against Iran meant 64,500 lost vehicle sales and led Renault to a 7.4 percent decline in its Asia-Pacific sales region, which includes India and South Korea. A deal late last year to ease sanctions temporarily has not yet allowed the carmaker to resume production or sales there, Stoll said. ‘We are looking at how to resume the supply of parts...as and when financial transactions with Iran are unblocked,’ the Renault sales chief added.” (Reuters, “Renault's budget cars power global sales gain,” 1/21/13)

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“A delegation of some of France's biggest companies will visit Iran next month to seek business as relations thaw with western powers, the head of the employers' union said on Wednesday…The prospect of an easing of trade restrictions has whetted the appetite of French firms eager to win back business in a country where some used to have extensive operations. The French Medef bosses' association has organized the visit for February 2-5, its president Pierre Gattaz told a news conference, confirming a report about the trip in the Wall Street Journal…Former French ambassador to Iran Francois Nicoullaud told Reuters that French firms that operated in Iran before the sanctions wanted to return. He cited Renault, PSA Peugeot Citroen, Airbus Group , Credit Agricole, Societe Generale and BNP Paribas. Peugeot and Renault already sent executives to Iran for an automotive conference last year.” (Reuters, “French trade delegation to visit Iran next month,” 1/15/14)

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"Iran significantly decreased production of two models of Renault automobiles in the first nine months of the current Iranian calendar year (started on March 21, 2013), Fars News Agency reported on Jan. 14.” (Trend, “Renault production falls in Iran," 1/14/13)

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"The nuclear deal struck by Iran and six world powers will put more rubber on the road in the Islamic Republic. The country’s major carmakers stand ready to start receiving parts again from French firms PSA Peugeot Citroen and Renault when the sanctions ease. That could see Iran’s stalled car production again take off, proving a boon to local automakers and potentially draw in more foreign investment from other manufacturers hoping to break into the market…Iranian Industry Minister Mohammad Reza Nematzadeh said Iran’s biggest carmakers are now holding talks with PSA Peugeot Citroen and Renault in Tehran for new joint venture projects and joint car spare parts production. That will greatly help Peugeot, Europe’s No. 2 automaker, which saw its profits hurt by the sanctions. Peugeot sold more than 450,000 cars annually in Iran before the sanctions. Renault sold more than 100,000 cars in Iran in 2011 before pulling out. 'PSA Peugeot Citroen and Renault will offer new cars to the market with the help of their Iranian partners,' the minister said. 'They’ve been big contributors to Iran’s auto industry. Given the Geneva deal, we hope sanctions will be lifted by the end of December so that joint ventures with foreign carmakers can resume.'" (AP, "Iran nuclear deal hits gas pedal for carmakers," 11/30/13)

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"Major carmakers and parts suppliers showed up in Tehran on Saturday to assess the Iranian market's 'considerable potential,' just one week after Iran's historic nuclear agreement with world powers. The International Conference of the Automotive Industry, the first such event in Iran, has brought together more than 150 companies from around the globe, according to organisers…Industry Minister Mohammad Reza Nematzadeh said he wanted 'more cooperation with foreign companies,' including French manufacturers Peugeot and Renault, both of which have had a long history of doing business with Iran…Gilles Normand, director of operations for Renault in the Asia-Pacific market, said the Middle East represented a 'future market' for all manufacturers…Renault, present since 2004 in Iran, sold more than 100,000 cars in 2012, accounting for 10 percent of the market." (AFP, Carmakers rev up for return to Iran market, 12/1/13)

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"Sasan Ghorbani says the Iranian auto industry conference he’s organizing in Tehran next weekend is suddenly a hotter ticket than he’d expected…Among confirmed participants in the Iran Auto Industry International Conference on Nov. 30 are Renault SA (RNO) and Italy’s Pininfarina SpA (PINF), according to the event’s website. Their arrival holds out the promise of investment in an economy driven into recession by sanctions, and may add to the post-Geneva optimism that’s also on view in Iran’s unofficial currency markets, where the rial has surged since the accord was signed." (Bloomberg, "Iran Accord Sparks Race to Tehran as Automakers Target Deals," 11/26/13)

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"French carmakers Peugeot and Renault look to be among the clearest beneficiaries of the interim deal that lifts some sanctions on Iran, with both hoping to leap back into the Middle East's biggest auto market. One of the explicit concessions world powers made in the accord signed Sunday in exchange for Iran curbing its nuclear programme was the promise to 'suspend US sanctions on Iran's auto industry.' For Peugeot and Renault, which had to pull out of Iran in 2011 and 2012 respectively, those words are worth big money -- especially as both are struggling in a languishing European climate…Renault sold 103,000 vehicles [in Iran] last year before leaving…'Renault is satisfied by the signing of this accord, which should allow the sanctions to be lifted. If the sanctions are lifted, our activity which is currently slowed could return to its normal course,' a company spokeswoman said…On Monday, shares in PSA Peugeot Citroen soared 4.45 percent to 10.68 euros in afternoon trade, while Renault shares rose by 1.15 percent. That reflected what Tangui Le Liboux, an analyst at the Aurel BGC brokerage, said was the 'good news' the Iran deal brought the companies. 'The two French carmakers were the best placed among all their European rivals before the imposition of the embargo in recent years,' he said. The two companies will have the opportunity this week to renew their Iranian connections this week. The French industry ministry has organised a conference on Saturday in Tehran bringing together all of Iran's car makers. Renault has confirmed to AFP it will attend." (AFP, "France's Renault, Peugeot seen to profit from Iran deal," 11/25/13)

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"Efforts by PSA Peugeot Citroen and Renault SA to boost sales outside Europe’s slumping car market stand to get a boost from a deal to lift sanctions on Iran…Renault sold more than 100,000 vehicles in Iran in 2012 and took a first-half charge of 512 million euros as a result of its forced withdrawal from the country. 'This is good news for us as Iran is an important market for Renault,' said Florence de Goldfiem, a Renault spokeswoman. 'We’re waiting to see what the conditions of redeployment of our activities in the country may be.'" (Bloomberg, "Peugeot Set to Benefit Most in Europe From Iran Accord," 11/25/13)

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"The relaxation of sanctions on Iran promises an opening for international companies that have been sidelined from one of the Middle East's largest consumer markets…European companies may have more incentive than U.S. businesses to return quickly to Iran, since the loss of business in Europe is more recent and hit as the Continent's economy continued to struggle…Renault SA RNO.FR +1.26%  of France last year sold 103,000 cars in the form of kits requiring assembly in Iran by its joint-venture partner, Iran Khodro. In the first half of this year, Renault sold 25,000 kits before halting shipments because of the new sanctions…'We welcome this good news and hope to resume our activities as soon as the sanctions concerning the automobile sector are lifted,' a spokeswoman for Renault said. Renault has kept a small representative office open in Iran." (Wall Street Journal, "Iran Deal Has Western Firms Eager to Resume Business,"  11/24/13)

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"Iran Khodro (IKCO) says it is hopeful Iran's recent election of a new President will allow more partners - as well as its old Renault and Peugeot business allies - to have full operations in the country. Crippling sanctions - to which the new President Hassan Rouhani made reference in his first press conference yesterday (6 August) - have led Renault and PSA to suspend operations in Iran - but IKCO remains optimistic the situation can improve.'There is a hopeful environment - everybody knows this will be a new prospect - especially the car industry,' an IKCO spokesman told just-auto from Tehran. 'We have seen some foreign partners present in Iran, kind of suspended, but everybody here is very hopeful the new government and new environment will be started. So foreign partners will come to talk to IKCO - more than Peugeot and Renault - after the new environment new foreign partners come to negotiate with Iran' . . . 'It is a pause for the moment - we don't produce any more but that does not mean everything is definitively stopped,' a Renault spokesman told just-auto from Paris. 'We are waiting overall with the election of the new President.' If these relations go towards a sort of understanding between the two countries [France and Iran], it is clear [for] Renault, like other French businesses, the situation could be more simple, but at the base it is a political situation.'" (Just-Auto, "IKCO holds out hope for more foreign partners as new President elected," 8/7/13)

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"Renault wants to return to the key Iranian market as soon as the political situation eases but has little visibility when that will happen. Renault was forced to halt shipments of knockdown kits to Iran on July 1 when the U.S. government extended economic sanctions over the country's nuclear program to the automobile sector. Renault was one of the last large European companies still active in Iran and its withdrawal from the country is a blow for the automaker. With a volume of 100,783 vehicles sold in the country last year, Iran was Renault's eighth-biggest global market by sales, above No.9 Italy where Renault sold 96,144 units and Spain where it sold 83,366 cars. The automaker had a 10 percent market share in Iran in 2012. Renault builds the Logan and Megane in Iran with Tehran-based partners Iran Khodro and Paris Khodro. A Renault spokesperson told Automotive News Europe that the automaker is waiting for the sanctions to be lifted or for the political situation to change before it begins shipping CKDs to Iran again, but said the company has little visibility when that will be. Production of Renault vehicles in Iran will wind down when the kits already shipped to the country run out in the coming weeks. The production infrastructure in Iran used to build Renault cars will remain in place indefinitely, the spokesperson said. On July 26, Renault was forced to write off the entire value of its Iran operations because of the sanctions, leading to a 512 million euro charge against its second-quarter earnings. Renault's shipments of kits to Iran fell 48 percent to 28,082 units during the first half." (ANE, "Renault will seek to return to key Iran market," 8/6/13)

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"Renault SA said a €512 million ($680 million) provision to cover disrupted Iranian sales weighed on its earnings in the first half of the year. A six-month operating loss of €249 million also reflected falling revenue from chronic weakness in the European automobile market, the French car maker said Friday. The Obama administration's decision in June to toughen economic sanctions on Iran and to extend them to the automobile sector has meant that Renault can't repatriate money that it is owed, Chief Financial Officer Dominique Thormann said to a group of journalists. Renault has no industrial activity in Iran. It has no employees and no fixed assets. It ships kits of semicompleted vehicles that are assembled by its Iranian partner, and these shipments are being halted, Mr. Thormann said. Renault is basically writing off its Iranian receivables, he said. Still, the company reaffirmed its full-year earnings guidance for an increase in automobile sales and positive operating margin and free cash flow for its core automotive division." (The Wall Street Journal, "Iran Provision Hits Renault Earnings," 7/26/2013)

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"French car maker Renault SA, one of the last large European companies still active in Iran, is considering winding down its sales to the country as the impact of international sanctions deepens, according to people familiar with the matter...  New U.S. sanctions targeting Iran's automotive sector since July 1, combined with difficulties in getting paid by Iran as its economy sharply declines, has led Renault to cut its sales of automobile kits to Tehran's manufacturers and review its strategy in the country. A spokeswoman for Renault said the company's commercial transactions in Iran 'are slowing down, and we don't have any visibility for the future.' Renault said recently it 'is taking appropriate measures necessary to address the scope' of the new U.S. sanctions and their impact on its Iranian operations. Renault has been active for years in Iran, where it sells kits of semi-assembled vehicles that are built up by its Iranian joint venture partner Iran Khodro. But international sanctions over Iran's nuclear program have made doing business in the country much more challenging...Though European Union laws don't forbid trade with Iran's car makers, being targeted by Washington's sanctions could complicate access to the U.S. financial system, according to one of the people familiar with the matter. Without naming Renault, a spokesman for the U.S. Treasury said 'companies around the world have taken notice of these new sanctions [on Iran's automotive sector] and are rightly considering whether they want to continue business with Iran.' Renault's business has been long under pressure in Iran, though the market represents just a sliver of its global sales. The auto maker delivered 28,082 car kits to its Iranian partner in the first half of the year, down 48% from the same time a year earlier. Renault officials point out that the Iranian automobile market slumped 41% over the same period. Still, the French company's market share has shrunk to 8.8% from nearly 12% in 2012. 'Due to economic factors in Iran, sales transactions are currently slowed down, in particular the supply of parts to our Iranian partners,' said the Renault spokeswoman. Although Iran's share of Renault's global sales has now fallen to just 2% from 4%, the impact of ceasing to do business there could be magnified because it could force the company to write down the value of kits that are either unpaid, or on which payments cannot be repatriated outside Iran, according to the people familiar with the matter. Renault will release its first-half earnings Friday, where management could mention the company's situation in Iran. Last year, Renault's French rival PSA Peugeot-Citroën SA took provisions and registered operating losses on its Iranian business after it decided to stop selling car kits to Iran, because it couldn't obtain financing for shipments. (The Wall Street Journal, "Renault May Scale Back in Iran," 7/25/2013)

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"Renault says it is studying closely new sanctions imposed against Iran by the US as domestic manufacturer, IKCO, claims a tentative agreement has been been reached to build CKD Clio type 3 and 4 models at some point in 2013... 'We really do not have any product concerning Clio in Iran,' a Renault spokeswoman told just-auto from Paris... 'The sanctions, they target the supply of complete knock downs, this is a key point. We know it is becoming more complicated so we really have to go deeper into this.' Renault added it currently produces and sells Logan and Megane models in Iran, but there is rising pressure coming from the US President and lobby groups that appear to be increasingly targeting the automotive sector... 'There is no point in enlarging our activities - it is pretty much the opposite,' said the spokeswoman. 'Now we are really studying very closely to see in technical detail what the real impact [will be] from the new sanctions from the US'... Renault imports parts as well as having localised production in Iran and has a subsidiary known as Iran Pars, 51%-owned by the French automaker and 49% by a domestic partner." (Just-Auto, "Iran: Renault Mulls New US Iran Executive Order as IKCO Claims CKD Clio Build," 7/23/13)

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"According to the report, 17 car brands have been permitted to be imported in the current year. The cars include Hyundai (2 models), ABT, Alfa Romeo (2 models), MG, SsangYong, Toyota, Renault (6 models), and Kia (2 models)." (Azer News, "Iran bans imports of renowned car brands," 5/27/2013) 

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"A US activist group on Wednesday urged French automaker Renault and its Japanese partner Nissan to pull their business out of Iran because of its suspected program to develop nuclear weapons. In an open letter to Carlos Ghosn, the Renault-Nissan Alliance's chief executive officer, the advocacy group United Against Nuclear Iran (UANI) said, 'Renault's business dealings in Iran directly support the Iranian regime's ability to develop its illegal nuclear weapons program, support its terrorist proxies and pursue a brutal campaign of repression against the Iranian people.' While other industry groups left Iran to avoid supporting the current regime, Renault has doubled its production in Iran from about 50,000 vehicles in 2010 to 93,578 in 2011, according to UANI." (AFP, "US activists pressure Renault-Nissan to leave Iran," 4/5/2012) 

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"Nestle has been the target of protests by Islamists since the Gaza onslaught began, some Iranian websites said. It is among a small number of foreign companies which have factories in Iran, which notably also includes French automaker Renault. Others, such as South Korean group Samsung, market their products in the Islamic republic. Some, particularly in the oil and gas sector, have operated in the country for some time, such as France's Total and Anglo-Dutch Shell." (Agence France Presse, "Iran to punish firms trading with Israel," January 12, 2009)

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"GIANTS WITH A FOOT IN TEHRAN: Total, Shell, Statoil, BNP Paribas, Commerzbank, MTN, UPS, Linde, Technip, Nokia, Ericsson, Peugeot, Renault, OMV, Societe Generale, ENI, Mitsubishi, Sumitomo, Siemens, LG, Samsung, Bosch, Valeo, Nestle, Unilever, BAT, Japan Tobacco." (The London Times, "American pressure threatens UK firms,"  May 27, 2006)

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"Peugeot and French rival Renault have a 40 to 50 percent market share in Iran." (Agence France Presse, "Iran car maker reducing ties with French partners," January 20, 2009)

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"Renault signed a joint-venture in February with Mahindra & Mahindra to make 50,000 Logan sedans in India starting in 2007. It is building a joint-venture factory in Iran with the capacity to produce as many as 300,000 Logan models a year." (The International Herald Tribune, "Renault's 2nd thoughts on China," December 13, 2005).

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