Groupe Renault is announcing the signature of a joint venture agreement with the Industrial Development & Renovation Organization of Iran (IDRO) and PARTO NEGIN NASEH Co, an importer of Renault products in Iran.

The proposed joint venture company, of which Renault will be the majority shareholder, will include an engineering and purchasing center to support the development of local suppliers as well as a plant with an initial production capacity of 150,000 vehicles a year, supplementing Groupe Renault’s existing capacity of 200,000 vehicles a year in the country. The first vehicles to be produced at the plant will be new Symbol and new Duster.

In addition to the vehicle plant announced in September 2016, an engine plant is also planned with a capacity of 150,000 units a year. The manufacturing facilities will be in Saveh, located 75 miles from Tehran. They will be owned and operated by the joint venture company.

The agreements also provide for the development of an exclusive Renault distribution network, in addition to the existing network of NEGIN Khodro.

“In a rapidly expanding Iranian market, it was vital to implement plants, engineering, and a purchasing center” said Thierry Bollore, Renault’s chief competitive officer. “This joint venture will enable an acceleration of our growth in this country.

Groupe Renault has been present in Iran since 2003 through a joint venture with SAIPA and IRAN KHODRO. Renault and its Iranian partners have produced 500,000 vehicles to date.

“The development of a commercial network specific to our brand will reinforce Groupe Renault’s position in Iran”, said Stefan Mueller, Renault’s chief performance officer. “The signing of this new joint venture reinforces the strategic choices we have made in Iran and will open new perspectives in a two- million vehicle market projected in 2020.”

Finalization of the transaction remains subject to regulatory approvals, formation of the new company, and preparation of the industrial assets for the project. The parties expect completion to take place around October 30, 2017.

In first-half 2017, Renault sales in Iran increased 100.3 percent year on year, for a total 68,365 vehicles and a 9.7 percent share of the market.