Reporting "Asre Khodro",The public relations manager, Morteza Aghaei said, “The company has signed a multilateral deal with Iranian universities, government bodies and a foreign firm namely Pininfarina to pave the way for manufacturing hybrid and electric cars,” local automotive website Khodro Nevis reported.

He said IKCO partners will provide the technical expertise and the largest carmaker in Iran is planning to start mass production of eco-friendly vehicles within the next three years.

Earlier in May Italy’s Pininfarina automotive design house signed a $84 million commercial agreement with IKCO to develop a technological automotive platform.

The agreement will help develop a modular automotive platform that will  house at least four different vehicles.

IKCO’s plan to produce eco-friendly vehicles starkly contrasts with its present performance that so far has been hazardous to the environment.

The company produces several models which are notorious for excessive emission and fuel consumption. One model, the Peugeot 405, which currently has a 39% share in the company’s output, is a 30-year-old clunker the Iranian standard organization wants off the roads sooner rather than later.

Production of this model was halted almost two decades ago in Europe. The car is of low quality and contributes generously to air pollution in the major cities.