Iranian Carmaker Says Cannot Deliver Presold Renaults

EghtesadOnline: Pars Khodro, a subsidiary of Iranian car company SAIPA, reportedly presold 36,000 Renault cars which it now says it cannot deliver because the new US sanctions have disrupted the supply of parts.

News ID: ۷۴۶۸۸۳

10 March 2019

The company used to sell Renault Logan (locally known as Tondar 90) plus Sandero and Sandero Stepway. According to the Persian-language economic newspaper  Donya-e-Eqtesad, before the US re-sanctioned Tehran, the firm presold 36,000 Renault cars.

After the latest sanctions, the French carmaker, fearing the wrath of mercurial US President Donald Trump, put its Iran operations on hold. Soon after that the supply of parts was disrupted along with most delivery schedules.

Hit hard with the new and disturbing realties, Pars Khodro stopped taking orders for its Renault cars. Furthermore, with the delay in delivery of presold Renaults extending further, the company wrote to customers making reimbursement offers as per which buyers could get their money back with 24% interest or take another vehicle instead of the popular Sandero or Logan, according to Financial Tribune.

The cars it is now offering are Pride and Tiba that are notorious for low quality and are not popular compared to Renault sedans.

Plummeting Production

With Renault operations suspended, importing parts for making Logan and Sandero, if not impossible, has become extremely difficult. The obvious outcome is the Pars Khodro unable to deliver the presold cars as had been the procedure for years.

According to the Industries Ministry data, during the 10 months to Jan. 20, Pars Khodro made 33,860 Logans and Sanderos – down by a massive 62.7% in Renault  production compared to a year ago.

It merits mention that most of these vehicles were made during the first months of the current Iranian fiscal year which started in March 2018 and before Washington re-sanctioned key sectors of the Iranian economy.

During the one month to Jan. 20, only 3,302 Renault cars were made by Pars Khodro down 71% compared to the corresponding period a year earlier.

In addition to Pars Khodro and its parent company SAIPA, Iran Khodro, the biggest carmaker, had ties to Renault. IKCO too manufactures the popular Logan.

Data from the ministry show that during the 10 months to Jan. 20, Renault production rate at IKCO plummeted with output dropping to 9,699 cars from 41,226 -- down 76.4% year-on-year.

Again most of these cars were made during the first months of the current calendar year. In the one month to Jan. 20, showing an 86.7% decline in production of Renault cars, IKCO hardly made 628 Logans, significantly lower than last year’s 4,718.

Outrageous Prices

With the supply of Renault cars severely disrupted, prices of Logan, Sandero and Sandero Stepway entered prohibitive territory unseen in the auto production history of the country.

The cheapest Renault model now available in domestic market is the Logan which comes with a price tag of 1.14 billion rials ($8,700). The same car would not fetch 440 million rials ($3,350) last spring.

Sandero and Sandero Stepway prices have almost tripled. The Sandero goes for 1.5 billion rials ($11,450) significantly higher than 560 million rials ($4,270) last  March.

The Stepway is sold for 1.6 billion rials ($12,200). Going back 12 months the price tag was 650 million rials ($4,960).