Iran has replaced the head of partly state-owned Iran Khodro, the Middle East's largest car maker which has a joint venture with France's Renault (RENA.PA: Quote, Profile, Research, Stock Buzz), Iranian media reported on Tuesday.

The reports carried by several newspapers did not give a reason why managing director Manouchehr Manteghi was replaced by Javad Najmuddin, who previously headed a subsidiary of rival state car firm Saipa.

Saeed Laylaz, editor of business daily Sarmayeh, said Iran Khodro had lost market share and its drive to establish branches in countries such as Syria and Sudan had not been profitable.

A big chunk of the car market was lost to the competition, Laylaz wrote in a commentary in another Iranian daily, Etemad-e Melli.

There was no immediate comment from Iran Khodro, which like other Iranian vehicle companies enjoy high tariff protection from foreign rivals in the country of 70 million people.

Sarmayeh said the change of managing director was carried out by the Industries Development and Renovation Organization, which is in charge of state firms in the automotive industry.

The newspaper quoted Manteghi as saying Iran Khodro's sales amounted to $10 billion in the 2008-09 Iranian year, when he said it exported 42,000 cars. Manteghi has been appointed senior adviser to Industries and Mines Minister Ali Akbar Mehrabian.

Iran Khodro has partnerships with global carmakers, such as a joint venture with France's Renault (RENA.PA: Quote, Profile, Research, Stock Buzz) to make the no-frills Logan, sold in Iran as the Tondar-90, and also Peugeot's (PEUP.PA: Quote, Profile, Research, Stock Buzz) 206 and 405 models.

Manteghi, who headed Iran Khodro for six years, said in January the company aimed to boost output and exports in coming years despite a global downturn for the sector and Western sanctions on the country which have pushed up costs.

He told reporters Iran Khodro was profitable but did not give figures. He also played down the impact of sanctions imposed over Iran's disputed nuclear programme.

Iran, the world's fourth-largest oil producer, was ranked the 16th biggest car producer in 2006. (Reporting by Hashem Kalantari; Writing by Fredrik Dahl; Editing by Jon Loades-Carter)

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