Speaking to reporters Manouchehr Gharavi said that the Iranian company and Fiat have signed an agreement stipulating for Fiat to produce six of the most successful and popular models and parts in Iran.

Beginning in the second half the 2005, the models will be produced using dual fuel types -- gasoline and CNG -- of which the Fiat is renowned producer in the world.

Initially over 35 percent of the spare parts will be manufactured in Iran. Also, in the initial phase over 100,000 cars are to be manufactured increasing to 250,000 in later phases.

Gharavi added that the company has invested 200 million euros in the deal. The cars will be priced in the range of rls 80 million to rls 170 million (one US dollar = rls 8,800), he added.

Fiat Avio Managing Director Herbert Dumel said that investment will be good policy to gain a foothold in regional markets.

He also added Iranian automobile manufacturing market has grown impressively in recent years. "Our goal is to transfer modern technology to Iranian automobile industry."

In the latest news in international companies activities in Iranian auto industry, British Motors Company (B.M.C.) of Turkey announced here in January that the company is engaged in a very tight competition with other world leading companies on the Iranian market.

The company is to broaden its scope of activities in potential markets in the Middle East region.

Deputy Chairman of B.M.C. in Turkey Mehmet Demirpence, said that the company is the first Turkish company to export its products under commercial trade name.

B.M.C. has signed its biggest foreign trade contract with Iranian auto manufacturing company 'Kaveer Khodro Automotive Industries (K.A.I.)', he said.

The contract was signed in July 2003 during the Iran-Turkey economic commission meeting in Istanbul by B.M.C and K.A.I.

The joint venture project focuses on production of heavy-duty trucks as well as modern buses to be offered to foreign markets, he said.

Based on the contract, the Iranian side is authorized to manufacture vehicles under B.M.C. license in the city of Ardakan in Yazd province. The Turkish firm will transfer technological know-how for mass production of vehicles to Iran, he pointed out.

In the first five years, some five thousands of trucks and modern buses valued at dlrs 300 million are to be manufactured, he said.

Iran is considered as the biggest market for Turkish auto industries, he said adding that the company is to produce a new type of automobile under trade mark of 'Mega Star' for the Iranian market.

B.M.C. dispatched the first series of its products to Iranian market last year.

Based on the contract, the first series of trucks and buses have been delivered to Iran while the others are to be manufactured in Iran.

This is the biggest contract between Iran and Turkey in auto industries. B.M.C. as the top twenty manufacturers of heavy-duty vehicles in the world has established assembly lines in South Africa, Kenya and Malaysia.