According to the English-language Iran Daily, Renault Chairman Louis Schweizer said his company and an Iranian party has reached an agreement to turn Iran into a main hub for Logan exports to other Middle East countries.

Schweizer, who is due to be succeeded by Nissan chief Carlos Ghosn, said that the Logan model that will be launched comes from the family of Renault L90 budget sedans.

He highlighted a part of the agreement which entails the French company to transfer the L90 know-how to Iranian auto makers.

"How would it be possible for us to produce 300,000 cars in Iran and not transfer the technology as well?" he asked.

The Logan, which will sell for 5,000 euros (6,000 dollars), was presented to the international press at Renault's technical center in Guyancourt, west of Paris, on Wednesday.

The company, which hopes to sell 700,000 Logans by 2010 as part of its goal to sell four million vehicles before the year's end, said the Logan could eventually be introduced in markets in western Europe as well.

The vehicle has been designed and developed to suit customers with lower income budgets, such as employees, who nonethless want modern, functional cars without the accessories favored by drivers in western Europe.

Logan will initially be manufactured in Romania in factories operated by the Romanian automaker Dacia, which Renault acquired in 1999. But there are also plans to produce the car next year in Russia and Morocco, in Colombia and Iran in 2006, and possibly in China.

There are, however, doubts whether this low-budget car will be able to replicate the huge success of the cheap "people's" car, the German Volkswagen, popularly known as the "beetle," or the French Citroen's Deux Cheveaux, both of which became tremendously popular as utility vehicles after World War II, or even the British Austin Mini in the 1960s.

Starting in autumn of this year, the car will be marketed by Dacia in eastern Europe and will later be sold as part of the Renault line in Iran and Russia and, possibly, in Colombia.

The automobile is expected to sell for a maximum of $10,000 in Iran.

The French company Renault, in a press release on Wednesday, praised the Iranian automotive industry as having improved significantly in the past three years.