A manufacturer of hi-tech electronic testing equipment is supplying to a country once labelled part of the axis of evil.

Davis Decade, based in Birmingham, has signed a deal with one Iranian car manufacturer and is close to sealing another.

Davis, which employs 11 people at its base in Erdington, is supplying its production diagnostic machines to Pars Kodro at its factory in Teheran in addition to a host of car manufacturers in the UK.

The machines will be used to monitor and measure the production line which makes Renault 5s, which Pars builds under licence for the Iranian domestic market.

Ian Kimberley, managing director of Davis, said: "We have an agent who works in India who also works in Iran, and one of their requirements was for car production process monitors.

"He got in touch with us and we started negotiations about three years ago and it followed on from there."

Davis Decade is also talking to Iran Kodro, which makes Peugeot 206s and 405s under licence in Iran.

Mr Kimberley said: "Many of the companies want to sell their cars abroad, but to do that they need to invest.

"They need to invest in new technology and start to use it, and they are looking to western countries to help them to advance their industry.

"There is a big domestic market and a massive market around the Gulf, and our machines can help them do that. The Iranians recognise they need to improve their efficiencies and quality levels before they can start to export."

Mr Kimberley said he had visited many of the factories, gathered in one district of the Iranian capital.

He said: "It is very impressive what they have managed to build up over the years considering the country has been isolated.

"For them it has been like working on a desert island - they have had to build up everything themselves.

"When you look at it that way it is very impressive."

Davis designs, develops and manufactures a range of measurement, control and information systems for the manufacturing industry.

Specialist areas include load measurement in power presses, assembly machines, and process testing machines.

Mr Kimberley said: "Our machines are like the heart monitors for machines.

"If something goes wrong with the production process, our monitoring machine will spot it and alert people so it can be rectified.

"If the tooling wears out, or the temperature gets too high for example, our machines will spot it.

"They can reduce machine downtimes by about 25 to 30 per cent and increase productivity by the same amount."

Davis has already done around £100,000 of business with Iran, although this figure could increase if it is successful with its other contacts.

So how does the company find working in a country that was described by George W Bush as a member of the "axis of evil".

"We have an engineer going over there in a few weeks to put in some of the machines, and he's a bit worried.

"But that's because he's a vegetarian and the Iranians eat a lot of meat. The rest of the stuff is all politics which we don't get involved with.

"In some ways it helps us because American companies are not allowed to trade with Iran so we have less competition."

The firm exports about a quarter of its £1 million sales, with other key markets in India and Brazil.

In India the firm supplies its products to component manufacturers while in Brazil it supplies Ford. It also has customers in Australia and western Europe.

Over the next two years the firm wants to expand its exports to around 50 per cent, helped by innovations including text messaging from the monitoring machines so problems can be detected remotely.

"We are the only UK company in our field, our main competitors are from Germany and America. We are now trying to build up a serious brand name, which will help us supply more in future."