PARIS -  French carmaker Renault said it would start a joint venture in Iran, tapping into the country's fast-growing car market as it opens up to foreign investment after the end of Western sanctions.

The venture, in which Renault will hold a majority stake, includes a new production plant that is to raise Renault's production capacity in Iran to 350,000 vehicles per year from 200,000 now, it said in a statement.

Iranian Industry Minister Mohammad Reza Nematzadeh called Renault, which has been active in Iran for more than 12 years, "the ideal partner for this project".

Renault chief Carlos Ghosn said Iran's car market is projected to reach two million vehicle market by 2020, giving it "undeniable potential".

The factory is to roll out its first Symbol and Duster models in 2018, Renault said.

The venture will, for the first time, give Renault its own distribution network in Iran, complete with sales and aftersales services, it said.

Renault sales in Iran rose by 56 percent in 2015 from a year earlier to 51,500 vehicles, giving it a market share of 4.8 percent. Growth continued to be strong in the first eight months of this year, the company said.

Iran has tried to attract foreign companies back since Western sanctions over Tehran's nuclear programme ended a year ago.

President Hassan Rouhani has said he hopes the end of sanctions will help Iran attract $30 to $50 billion in annual investment.

Renault promises total cooperation

French automaker Renault said it would cooperate fully in a government probe into emissions cheating that has rocked the European car industry.

Renault is "totally determined to cooperate ... we are ready to open everything," Renault boss Carlos Ghosn told AFP at the Paris car show, adding that it was "necessary to restablish trust."

French Environment Minister Segolene Royal last year launched a probe into emissions cheating, a year after Volkswagen admitted to fitting 11 million cars with software designed to fool emissions tests in off-road conditions.

In preliminary findings published in July the commission did not rule out that other carmakers were also guilty of using cheating software.

Renault moved into the spotlight when the Financial Times quoted members of the inquiry team as saying that the report "omitted significant details", and suspected that the inquiry was too lenient on Renault because of the government's 20 percent stake in the carmaker.

Royal denied the report, and said last week that additional tests were under way to try to ensure that manufacturers cannot 'game' or rig testing results.

Ghosn said that gaming ran "against the interest of carmakers" and said he hoped the European Automobile Manufacturers' Association ACEA would lay down rules as the industry needs "undiscutable measurements".