Renault has announced an agreement has been signed for the creation of a joint venture with the Industrial Development & Renovation Organization of Iran (IDRO). Renault will be the majority shareholder.

“With a 2 million vehicle market projected by 2020, Iran’s automobile market has undeniable potential. The signing of this agreement corroborates the strategic choices we have made in Iran and opens a new era by enabling Renault to assume a very strong position,” said Carlos Ghosn, Chairman and CEO of Renault.

The joint venture will include an engineering and purchasing center that will support the local suppliers, as well as a plant with an initial production capacity of 150,000 vehicles per year, which will be added to Groupe Renault’s current capacity of 200,000 vehicles.

“The Iranian government wants to attract foreign investment in the Iranian car industry to bring competitive new products benefiting Iranian customers with respect to standard, quality and safety. Various options have been considered, and because of its continuous presence in the country for more than 12 years, Renault was the ideal partner for this project,” said Mohammad Reza Nematzadeh, Minister of Industry, Mine and Trade of the Islamic Republic of Iran.

The first vehicles to be produced in the plant will be the Symbol and the Duster, beginning in 2018.