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Tuesday July 10, 10:03 PM Iran carmaker seeks partners amid sanctions threat TEHRAN, July 10 (Reuters) - Iran Khodro, the Middle East's biggest carmaker, wants to find new global partners to reduce its vulnerability to further U.N. sanctions, which have already driven up financing costs, the company's head said on Tuesday. Manouchehr Manteghi, chief executive and president of the part state-owned firm, also said he wanted to meet a government deadline this month to stop making cars for Iran's market that run only on gasoline by directing such cars for exports. Most cars that come off the production line can already run on both gasoline and compressed natural gas (CNG), he added. Iran, ranked as the world's 16th biggest car producer in 2006, began rationing gasoline in June. Although Iran is a big crude exporter, it cannot refine enough oil to meet gasoline demand, so it has to import 40 percent of its fuel needs. That is a sensitive issue when Iran faces the prospect of a third, tougher round of U.N. sanctions for refusing to halt sensitive nuclear work. Narrowly focused till now, analysts say sanctions have still hiked finance costs and deterred investors. "In order to minimise our vulnerability we are trying to expand our portfolio and diversify it so that, were there to be sanctions which posed problems for one partner, we will have others to collaborate with," Manteghi told a news conference. He was speaking at the Tehran headquarters of the company which produced more than 525,000 cars and pick-up trucks in 2006/07, accounting for 49 percent of Iran's total output. International media were invited to the conference to act as "emissaries" in the firm's bid to build new alliances, he said. Iran Khodro already has partnerships with global carmakers, such as a joint venture with France's Renault to make the no-frills Logan, sold in Iran as the Tondar-90. It also makes vehicle models such as Peugeot's 206 and 405 and Suzuki Motor Corp's Grand Vitara. RISK PREMIUM Manteghi said: "International pressure so far has not been very effective" in deterring partners and the firm was drawing up strategies to ensure production would not be disrupted in the future even with more sanctions. The U.N. Security Council has slapped two rounds of sanctions on Iran since December for not stopping work the West says is designed to build atomic bombs, a charge Iran denies. The steps have included targeting the nuclear industry and a bank but Western states are now pushing for broader measures. Manteghi said existing sanctions had pushed up the risk premium for financing. He said where rates were 2 percent above those in European states before sanctions, now they were 15 percent more. "We are looking to find ways to lower the cost, with the central bank," he said. Iran remained a competitive carmaker that should encourage partners because of proximity to Middle East and other markets and low wages. Iran's central bank, sitting on windfall oil earnings, has said it was offering financing help to Iranian businesses. Carmaking is a big employer in Iran, where the jobless rate is in double digits. Iran Khodro has about 20,000 workers but the network of suppliers and others adds 450,000 more, Manteghi said. He said Iran Khodro's goal was annually to double the firm's export earnings, which hit $315 million in 2006/07. So far, he said, the firm was in line to double that figure in 2007/08. Another focus of the firm is to make more low fuel consumption vehicles and cars which run on both gasoline and CNG, spurred on by the government's move to ration fuel. Iran's Industry Ministry said production of cars in Iran that ran only on gasoline would stop this month. "Rationing did not have an impact on us. Rather we had prepared ourselves for it," Manteghi said. Iran Khodro made about 2,200 cars a day and aimed to make 1,500 of them dual fuel by the end of summer, he said. The rest would be exported, he said, adding "Perhaps we (will) negotiate with the ministry" about some domestic sales of gasoline-only cars.