Groupe Renault has announced plans to enter into a joint venture (JV) to establish a vehicle production plant, and an engineering and purchasing centre, in Iran.

As the majority shareholder, the France-headquartered automaker is to partner with the Industrial Development & Renovation Organization of Iran (IDRO) and Parto Negin Naseh Co (Negin Holding) to form the JV entity.

The proposed manufacturing facility will boast an initial production capacity of 150,000 vehicles per year, supplementing Renault’s existing 200,000-unit capacity in Iran.

The Renault Symbol and Duster models will be the first vehicles to be produced at the new plant.

Thierry Bollore, chief competitive officer of Groupe Renault, said: “We are happy to sign this agreement with IDRO and [Negin Holding].

“In a rapidly expanding Iranian market, it was vital to implement plants [and an] engineering and purchasing centre. This joint venture will enable an acceleration of our growth in this country,” he added.

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In addition to the vehicle production plant, the JV entity will establish an engine plant with an annual production capacity of 150,000 units per year. Both manufacturing facilities will be located 120km from Tehran in Saveh

Entry into force and finalisation of the proposed transaction remains subject to numerous conditions and precedents, including regulatory approvals, formation of the new company, and preparation of industrial assets for the project.

The parties expect the deal to complete in Q4 2017.