Naza Corporation Holdings and Groupe PSA have announced the signing of a share sale agreement and a joint venture agreement, officially establishing shared operation of the Naza Automotive Manufacturing (NAM) plant in Gurun, Kedah as the first manufacturing hub in ASEAN for the French carmaker. The signing was witnessed by prime minister Datuk Seri Najib Tun Razak this morning.

With the agreements in place, the French maker of Peugeot and Citroen (Europe’s second largest carmaker after VW, now in control of Opel/Vauxhall) will hold majority stake in the business operations of NAM. The stake is reportedly 56%, with the sum undisclosed. The Naza Group will have sole responsibility for the distribution of Peugeot, Citroen and DS brands in Malaysia. With PSA, it will explore distribution prospects in other ASEAN markets.

According to Naza, the NAM plant has been operational since 2004, has a workforce of close to 450 people and has a production capacity of 50,000 units per annum. NAM is expected to become PSA’s export hub for the region, with forecast volume of 18,000 units in 2019 and 21,000 units in 2020.

PSA’s investment in NAM will see the implementation of its EMP2 modular platform dedicated to C and D segments – the first models to be produced in Kedah will be the Peugeot 3008 this year (currently sold here as a CBU import) and the Citroen C5 Aircross in 2019. The latter is a funky SUV that was unveiled in April 2017.

“The creation of the ASEAN 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. We are pleased to partner with Naza and continue leveraging our historical relationship,” said Carlos Tavares, Groupe PSA chairman.

“We are grateful for Groupe PSA’s support and confidence in Naza as we take our longstanding partnership to greater heights. With this collaboration, there is enormous potential for Kedah to be the leading automotive manufacturing hub in Malaysia,” said SM Nasarudin SM Nasimuddin, group executive chairman and CEO of Naza Corporation Holdings.

The Peugeot 3008 will be the first EMP2 model to be made in Gurun, followed by the Citroen C5 Aircross

The deal is a win-win for both parties. Naza has reportedly been keen to get its principals – it assembles for Peugeot and Kia – to take a larger role in the car business in Malaysia and ASEAN, and have equity partnerships with the local group.

The PSA Group’s appetite 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. Proton’s large but under-utilised Tanjung Malim plant was what both interested parties were eyeing. Now that PSA is in charge at Gurun, it remains to be seen if the plant will continue to assemble Kia cars.

GALLERY: Peugeot 3008 in Malaysia

GALLERY: Citroen C5 Aircross