Reuters reports that Renault has finally signed a deal to make its new €5,000 Dacia Logan model in Iran, citing as source a Renault spokesman. The news follows recent reports that the project was facing last-minute political obstacles inside Iran as some conservatives objected to a deal with a Western automaker.

Renault launched its Logan model, designed for emerging markets and to be manufactured at exceptionally low-cost, earlier this year. The three-box body style was chosen because it is regarded as a status symbol in emerging economies. From early 2007 other body styles will be launched on the same platform, including an estate and a small van.

Production in Iran would start in the first half of 2006, with capacity of 300,000 cars a year, the spokesman reportedly said.

The Logan will be built in many different countries, most often through partnerships with local manufacturers. It’s only in Romania that Renault is building the car on its own, through its fully-owned Dacia unit. The Logan has been launched at Renault’s Dacia factory in Romania, with plans also to manufacture the car in CKD form in Russia, Colombia, Morocco, Iran and China.