Proposed by Iran, the collaboration would include installing features such as a compass to determine the direction of Mecca for prayers, and compartments for storing the Quran and headscarves, Proton's managing director Syed Zainal Abidin told Bernama news agency.

'What they (Iran) want to do is to call that an Islamic car,' he said during a visit to Iran.

'The car will have all the Islamic features and should be meant for export purposes.'

The report did not give further details.

Proton is seeking aggressively to raise exports and boost sales as its domestic market share fell to 23 per cent, from about 60 per cent five years ago.

For years, Proton thrived in a protected environment in which high duties were imposed on imported vehicles, forcing many Malaysians to buy Proton cars.

But duties have been lowered in line with a regional trade agreement, and more Malaysians are buying imported vehicles.

ASSOCIATED PRESS