"We will enter into a contract with Japan’s Datsun in the coming months,” Iran Khodro CEO Hashem Yekezare told reporters.
He reiterated that the contract will be signed before the end of the current Iranian year (will end March 20, 2018).
Nissan has already said it would send so-called knockdown kits, to be assembled locally, rather than finished autos to Iran and that the automaker was looking to export kits for several thousand vehicles a year.
IKCO’s talks with Nissan for production of affordable cars of high quality began in early 2016, with the Iranian automaker targeting Datsun cars in the price range of $11,500.
The production of Datsun cars can potentially enable IKCO to phase out its dilapidated models in the same price category including the Peugeot 405.
Datsun is a resurrected brand targeting emerging markets. Nissan quit using the Datsun brand in 1981 but revived the nameplate in 2013 for increasing sales to Indonesia, India and Russia.
Iran is the Middle East’s largest auto market with a population of more than 80 million who are estimated to buy more than 1 million cars in 2017.
The automobile industry is seen as Iran’s biggest non-oil sector, accounting for nearly 10% of the country’s gross domestic product (GDP). Iran Khodro and Saipa companies account for more than 90 percent of the total domestic production in Iran.
Iran’s automakers have been approaching Honda, Toyota and Mitsubishi in the hope of transferring Japanese technology.
Mitsubishi Motors’ plug-in hybrid Outlander SUV is expected to hit Iranian roads as early as fall.
The redesigned Outlander, which curbs use of the conventional engine in favor of the twin electric motors, will be built in Japan and shipped to Iran, it added.
IKCO, holding more than half of Iran's market share, is the country's biggest car manufacturer.