IranKhodro, launched a joint venture with Germany's DaimlerChrysler on Saturday for the sale and customer services of Mercedes Benz cars in the country.

The joint company, Mercedes Benz is 50 percent owned by IranKhodro
and 50 percent by DaimlerChrysler. It will import cars and offer
after-sales services to customers.

"We also have issued a licence for assembly of 2,500 Mercedes in
the country for the year 2005," said Alexander Diebold, deputy
managing director of DaimlerChrysler office.

The German carmaker will export kits of its E-class sedans here
where they will then be assembled by a subsidiary of IranKhodro.

"Meanwhile, we hope to export between 300 to 400 completed cars
to the country in the same period," Diebold added.

For the first time in 10 years, the government permitted car imports
in the year to March 2005. But tariffs of 130 percent and red tape
limited the number of imported cars to around a few hundred.

The government has reduced the tariffs to 100 percent for the year
to March 2006, in a bid to motivate big names including BMW and
Toyota to export to the country.