Iran Khodro has said it was breaking its own production record in the 2009/2010 year but is concerned about Iranian government plans to cut high tariffs on imported vehicles.

With other Iranian car companies, Iran Khodro benefits from significant protection from foreign rivals, but the government is now planning to reduce import duties by 20 percentage points to 70% during the upcoming year.

Managing director Javad Najmuddin told Reuters such a move would help international companies from countries "which are issuing resolutions against us," in reference to UN sanctions imposed on the Islamic Republic over its nuclear activities.

He also told a news conference the company was generally ready for privatisation, but that he preferred to be given some time to boost productivity and adapt its finances.

He said Iran Khodro - maker of both cars and trucks - expected to produce 680,000 vehicles during the Iranian year that ends on 21 March, a new record for the company, although no comparison was given. Next year, the aim was to reach 730,000 units.

"Despite the global recession and the bankruptcies of globally well-know companies, Iran Khodro has remarkably broken its previous production records," Najmuddin said.

Iran Khodro's market share, which had declined to about 46% last year after the phasing out of an old model, increased to 49% this year, he said. "We are planning to reach 50% again in the coming year."

The company's exports had also grown, with 30,600 units sold in 20 countries in the last 11 months, the Iran Khodro head told Reuters. This was expected to rise to 55,000 units in 2010-11.

Iran, a major oil producer, is stepping up efforts to privatise state firms in a bid to revive the economy of the major oil producer, the news agency noted.

Najmuddin said Iran Khodro was "fully ready" for privatisation, but later qualified his statement by suggesting more time was needed.

"I should say it's better that they give us some time to correct our financial structures, increase our production and improve our productivity," he said.

Iran Khodro has a joint venture with Renault to make the Logan, sold in Iran as the Tondar-90, and also Peugeot's 206 and 405 models. But France is among the western countries that are seeking tougher sanctions on Iran over its nuclear ambitions.

But Najmuddin said: "Right now, our relationship with Peugeot is a win-win situation."

Market snapshot: Iran