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Last Updated: Wednesday, 6 October, 2004, 14:36 GMT 15:36 UK
Renault to produce cars in Iran
Dacia Logan
Renault hopes the Logan will power sales to a new market
French carmaker Renault has unveiled plans to build its new budget car, the Dacia Logan, in Iran.

The car is designed to help Renault boost its sales in emerging markets.

The Logan will be built in Iran by Renault Pars, a joint venture with Iran's Industrial Development and Renovation Organisation (IDRO)

Iran's parliament recently passed a law giving it a veto over foreign joint ventures, but Renault has narrowly avoided coming under its authority.

The law - aimed primarily at Turkish firms' investments in airports and telecoms - was passed in September and was retroactive to 20 March 2004.

Renault's deal to own 51% of Renault Pars was signed on 16 March.

The Dacia brand is that of a Romanian carmaker which Renault bought in 1999

Renault Pars is expected to produce 300,000 Logans a year from 2006 onward, Renault said, adding that it would market the car in Iran under its own brand rather than that of Dacia.

'No frills'

Following on from a recent launch in Romania, Renault is planning to release the Logan elsewhere in central and eastern Europe, and in the Middle East and north Africa - over the coming year.

Russia, Colombia, Morocco, and possibly China - as well as Iran - are on the agenda as well, both as markets and potential manufacturing sites.

There are also plans to bring it to Renault's more mature markets in western Europe, to compete with "budget" models from other carmakers such as Peugeot's 107 and Volkswagen's Brazil-built Fox.

The price in western Europe is likely to be some 7,500 euros, with exact figures depending on local tax levels.

Renault hopes to sell 4 million of the cars a year worldwide by 2010.

The Logan is based on the Clio, Renault's successful entry in the "supermini" class.

But it lacks the extras now supplied as standard on many manufacturers' models - the windows are manual, the radio lacks a CD player, and there is no sign of air conditioning, power steering or airbags.

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