Iran to build nation's biggest car factory by 2015

The output will be larger than the combined output of the two existing major carmakers, Iran Khodro and Saipa, the report said.

The vehicles will reach the market by March 2015, to be sold at an estimated price of $10,000-12,000.

Xinhua says Iran's vehicle makers are facing rising costs and lack of technological know-how as many foreign companies have left the country because of sanctions imposed due to Tehran's disputed nuclear programme.

Iran Khodro, which had been a partner of France's Peugeot since 1989, had to close down some production units.