Renault affected by anti-Iran sanctions

Renault affected by anti-Iran sanctions
Fri Jul 26, 2013 13:09:18

French carmaker Renault has blamed a massive write off of its operations in Iran for a steep drop in its first half earnings.

The carmaker behind the Clio and Megane hatchbacks says it took a 512-million-euro ($680-million) charge to write off the entire value of its Iran operations, which are threatened by the western sanctions on the Islamic Republic.

That along with other charges, including restructuring of factories in France, left Renault's first-half earnings at only 39 million euros, down from 734 million euros a year earlier, Renault’s statement read on Friday.

Renault said new car sales continued to fall as international growth couldn't offset poor markets in Europe, especially in France. It said further contraction in market conditions would put in doubt its full-year targets including higher worldwide registrations.

Figures released by the Committee of French Car Makers show that in the past 6 months, the number of new cars sold in the country has dropped by 11 percent compared to last year’s figures.

French car brands dominate roads in Iran. And they are the biggest victims of western-hatched embargos against Tehran.

Peugeot Citroen has lost 9.5 percent of the market figures and Renault has lost 4 percent in just one month.

The forecasts for the next six months show the French car industry will continue to go suffer in the coming months.

New figures show the French car industry is now in deep trouble. Experts say this will certainly have a great impact on France’s economy. This leaves almost no doubt that France is in a recession and may not escape it anytime soon.


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