Merceds Benz is creating a joint venture in Iran with Iran Khodro Diesel (IKD) for the production of Mercedes passenger cars. The production is due to come on stream by year-end 2005. IKD has a history with Mercedes, as it has been producing Benz trucks and buses.

It will be interesting to see if Mercedes uses its presence in Iran to more actively explore using dimethyl ether (DME) as an alternative fuel similar to the way it is aggressively exploring the use of biodiesel in India.

Why the connection? Iran is to be the site of the largest DME plant. (Earlier post.) DME is a clean burning (completely sootless) synthetic fuel that can substitute for conventional diesel, liquified petroleum gas (LPG) or be reformed into hydrogen for fuel cells. As a diesel fuel replacement it reduces NOx emissions 90%, meeting the 2007 diesel emission standards, and features high cetane. (Earlier post.)