PARIS/KUALA LUMPUR (Reuters) - French carmaker PSA (PEUP.PA) and Malaysian company Naza Corp have signed a deal to jointly produce PSA-branded cars for Malaysia and other Asian markets, as part of plans by the owner of Peugeot to boost its presence in the region.
The companies said on Monday that they had signed a share sale agreement and a joint venture agreement to establish a shared manufacturing hub in Gurun, Kedah, in Malaysia. PSA will own a 56 percent stake in the manufacturing hub, but no deal value was disclosed at the press event in Kuala Lumpur.
The Malaysian plant would have a capacity of 50,000 vehicles. The first vehicles are set to be produced in 2018 for Peugeot and in 2019 for the Citroën model, they added.
Naza said that with the joint venture, it aimed to export 20,000 cars from the plant in the next three years.
“The Naza Group will have sole responsibility for the distribution of Peugeot, Citroen and DS Automobiles in the domestic market and, with PSA, will explore distribution prospects in other Asean markets,” a joint statement said.
PSA said the deal formed part of the company’s “Push to Pass” strategic plan to boost sales. That plan envisages a 10 percent increase in sales by 2018 and a further 15 percent by 2021 versus 2015 for the French group.
“The creation of the ASEAN (Association of South East Asian Nations) hub in Gurun, Kedah is a significant leap forward for Groupe PSA which will lead to the development of a profitable business in the region as part of our Push to Pass strategic plan,” said Carlos Tavares, chairman of the Managing Board of Groupe PSA, in a statement.
The European carmaker’s entry into Malaysia echoes that of Chinese carmaker Zhejiang Geely Holdings Group Co Ltd’s GEELY.UL last year.
Geely bought 49.9 percent stake in Malaysia’s Proton, pledging to help the struggling national carmaker to strengthen its presence domestically and in the region. The group aimed to grow its own market share in Southeast Asia as it targets sales of 3 million cars by 2020.
Reporting by Sudip Kar-Gupta in Paris, and Liz Lee in Kuala Lumpur; Editing by Subhranshu Sahu and Stephen Coates