France's Renault signed an agreement with Iran on Friday to establish production line of cars and after-sales service centers in the Islamic republic, Tasnim news agency reported.

The memorandum of understanding (MoU) was signed in the presence of Iranian Minister of Industry, Mines, and Trade, Mohammad Reza Nematzadeh, and Renault CEO, Carlos Ghosn, in Paris on the sidelines of the 2016 Paris Motor Show.

Through the agreement, the Iranian car-making companies and Renault will establish joint ventures to produce cars and provide after-sales service in Iran.

The first vehicles to be produced in Iran will be under the brands of the Symbol and the Duster, beginning in 2018, semi-official Mehr news agency reported on Friday.

The joint venture will, on the one hand, include an engineering and purchasing center which will support the local suppliers, as well as a plant with an initial production capacity of 150,000 vehicles a year, which will be added to Renault's current capacity of 200,000 vehicles in the Islamic republic, according to the report.

Under the agreement, the group will, for the very first time, develop its own distribution network with sales and after-sales services in line with Renault brand standards.

"With two million vehicles planned to be produced by 2020, the potential of the Iranian car market is undeniable. This agreement confirms our strategic choices made in Iran and opens a new era allowing Renault to hold a privileged position in the country," the CEO of Renault was quoted as saying.

In July, it was announced here that Renault would produce five new products in Iran in collaboration with two major Iranian companies, Saipa Motor Corporation and Iran Khodro Company (IKCO).

Saipa and IKCO would produce three and two new cars, respectively, in cooperation with the Renault, said Fardad Daliri, deputy head of the Industrial Development & Renovation Organization of Iran.

The return of the French car makers to the Iranian car market began after the implementation of the nuclear deal between Iran and the world powers (known as JCPOA) in January.

In June, IKCO and the French carmaker Peugeot-Citroen (PSA) agreed to launch a joint company in the capital Tehran to produce cars.

The 50-50 joint venture, if finalized, would be worth 400 million euros.

The would-be company would manufacture the Peugeot 208, the 2008 sport utility vehicle, as well as 301 compact utilizing the local potential to make most of the parts.

Thirty percent of the cars, to be produced jointly, would be exported to the Middle East and other countries, Iran Khodro's chief executive, Hashem Yeke Zareh, said.

Under the U.S.-led sanctions against Iran on the latter's disputed nuclear issue, Renault and PSA left Iran in 2011.

Source : XINHUA