Iran is a key market for Renault, so the French are eager to return image

As soon as the political tension eases, Renault wants to return to one of its key markets – Iran – but has no knowledge on when will that happen.

Following U.S. government extension of economic sanctions over the country’s nuclear program to the automotive sector, Renault was forced to halt shipments of knockdown kits to Iran on July 1.

The French were one of the last major European companies still active in Iran and its withdrawal from the country is a serious blow for the automaker, as the Iranian car market was the eighth-biggest global market by sales, with 100,783 vehicles sold in the country last year. It was even above Italy where Renault sold 96,144 units and Spain where it sold 83,366 cars. To get the big picture, it does suffice to say the automaker had a 10% market share in Iran in 2012.

Renault builds Logan’s and Megane from CKD imports with Tehran-based partners Iran Khodro and Paris Khodro, and as the production of vehicles will wind down when the kits already shipped to the country run out, the production infrastructure will remain unused indefinitely. Also, the French company had to write off the entire value of its Iran operations, leading to a 512-million-euro ($680-million) hole in the second quarter earnings.