A new car plant has been opened in the central Iranian city of Kashan, according to local media reports.

News agency Irna said state-run automaker Saipa's new facility - developed at a cost of US$350m - will produce 150,000 vehicles per year.

The factory will build a range of sedans and small cars. One line to be known as Tiba (deer) will retail at between $8,000 and $9,000.

"This is the first Iranian vehicle with Iranian characteristics as it is designed and manufactured by Iranians," president Mahmoud Ahmadinejad was quoted as saying on the state-run television website.

"Tiba is the symbol of our confidence in ourselves ... The Iranian nation has shown that despite sanctions and pressures from enemies, we have resisted and have progressed."

But the also reportedly said Iranian car manufacturers should raise the quality of domestically-made models.

"The quality of our cars should be such that if an Iranian wants to buy a vehicle, he must prefer home-made ones," Ahmadinejad said.

Iran is the largest automaker in the Middle East and produced 1.4m vehicles last year.

Saipa and Iran Khodro both have links with Peugeot and Renault.

Iran Khodro said last week it produced over 680,000 cars and pick-ups in the year 21 March, 2009 to 20 March, 2010up about 16% year on year and setting a new record.

Tehran sets ambitious auto industry growth targets