Risky Business: French Automaker Renault Pulls Out Of Iran As U.S. Sanctions Arrive

Despite Having No American Operations, Prospect Of Future Business With U.S. Far Outweighs Benefit Current Business In Iran

French automaker Renault in July became the latest in a steady exodus of companies pulling business operations out of Tehran, following the first reinstatement of U.S. sanctions in Iran.

During a conference call with reporters and analysts, Renault Chief Operating Officer Thierry Bollore stated that the company would put on hold its business in Iran to “comply with U.S. sanctions.”  Bollore also stated that the company was “looking to new business opportunities, particularly in Africa, with strong growth to offset the missed opportunities in Iran.” 

“Renault’s withdrawal is an indication that with the August 6 deadline for U.S. sanctions finally here, the pressure is dialed up for any company still left in Iran,” said United Against Nuclear Iran (UANI) President David Ibsen.  “For Renault to explicitly express their desire to comply with U.S. law – even though they do not have any existing American operations – suggests that even the prospect of future U.S. business is far more enticing than anything they currently have in Iran.”

The exit marks the end of a years-long effort by Renault to expand its presence in Iran.  In June, the company reiterated that it was planning on staying in Iran with CEO Carlos Ghosn stating, “When the market reopens, the fact of having stayed will certainly give us an advantage.”  The company was also one of the first to express interest in re-entering the Iranian market in 2013, only days after the Iran deal was signed.

UANI Research Director Daniel Roth stated, “To a common sense-minded business executive, doing business in Iranmeans legitimizing a regime broadly known for being the world’s leading state sponsor of terrorism and investing in a market where you’d never know if the Islamic Revolutionary Guard Corps was taking the capital and using it to destabilize the region.  It was simply never worth the risk and it seems Renault has finally gotten the message.”

UANI has corresponded with Renault for six years, repeatedly warning company executives of the punishing business risk landscape in the Iranian market.  For example, some of Renault local partners in Iran had ties to sanctioned U.S. and EU entities.

The move comes at a time when other multinational-French companies have ceased operations in Iran as well.  In recent days, rival automaker Groupe PSA, oil giant Total and reinsurer SCOR SE have pulled out too.

It also marks a failure by French officials in their efforts to seek broad industry exemptions or extended wind-down periods for companies in Iran.  In July, U.S. Treasury Secretary Steve Mnuchin refused French Finance Minister Bruno Le Maire’s overtures to circumvent the sanctions.  For Le Maire, there was “little hope” of securing the waivers in the first place.