The Naza Group is set to sign an agreement with the PSA Group today. The signing ceremony will take place at the prime minister’s office and will be witnessed by PM Datuk Seri Najib Razak, the New Straits Times reports.

UPDATE: The PSA Group-Naza plant deal has been signed and announced.

Naza will be represented by group executive chairman and CEO SM Nasarudin SM Nasimuddin while the French maker of Peugeot and Citroen will be represented by executive vice president (China and South East Asia) Carlos Gomes.

NST‘s report does not mention the nature of the agreement, but a report by The Star on Saturday said that a global carmaker is close to completing a deal to acquire a majority stake in Naza’s plant in Gurun, Kedah. “The deal that will be signed next week will spell out the terms to make the Gurun plant as its base for the domestic and Asean market,” the daily’s source said.

It adds that the deal will see the global partner taking control of assembly and production at the Gurun plant, with Naza retaining the distributorship of the cars. “The partnership will allow the Naza group to price the cars competitively, much lower than now. At the moment, it is not able to price the cars well because the group is only a principal dealer,” the source added.

“The Gurun plant will give the global carmaker a ready manufacturing hub with enough capacity to target the demand in the ASEAN region,” the source said. Established in 2004, Naza’s Gurun plant currently has a 15,000 unit capacity. It was reported that due to low sales and production, the plant was forced to lay off workers last year.

Naza has reportedly been keen to get its principals – Peugeot and Kia – to take a larger role in the car business in Malaysia and ASEAN, and have equity partnerships with the local group. PSA Group’s intentions to expand in our market and region is well-known – the French carmaker was in the running to be Proton’s foreign partner before Geely was eventually chosen. PSA bought the Opel and Vauxhall brands from General Motors last year.