Iran's leading automaker is seeking to prioritise exports to Russia, its CEO said Sunday, as both countries reel under Western economic sanctions.

Iran Khodro unveiled the latest model of its crossover Rira vehicle at its factory west of Tehran, where CEO Mehdi Khatibi announced the manufacturer's ambitions for the Russian market.

"We are going to pay special attention to the Russian market, and we are also thinking of partnering with Russian investors," he said.

"We have held good negotiations with Moscow. The Russian market, with its capacities, will be one of our important markets," Khatibi added.

"We will begin exporting this year" to Russia, he said.

Iran Khodro had previously exported vehicles to Russia, notably between 2007 and 2009, Iranian media said.

Sunday's announcement comes after Russian President Vladimir Putin visited Tehran in July and met his Iranian counterpart Ebrahim Raisi and supreme leader Ayatollah Ali Khamenei.

Russia has come under increasingly tough sanctions since its February invasion of Ukraine, while Iran has faced stringent sanctions reimposed in 2018 when the United States unilaterally pulled out of a nuclear deal between Tehran and world powers.

The two countries have responded to the sanctions by boosting cooperation in key areas to help prop up their economies.

Iran Khodro's vice president, Kianoush Pourmojib, struck an optimistic note on Sunday, pointing to increased exports to Azerbaijan over the past five years.

"We are ambitious about improving the quality of our vehicles," he told AFP.

He added that while the manufacturer hopes to compete in markets such as Azerbaijan, Oman and Iraq, "in volume, it is of course Russia that is the most important".

"This year, we will produce more than 500,000 vehicles and our goal within three years is to export 100,000 vehicles annually," compared with fewer than 20,000 currently, he said.