DRB-Hicom Berhad has signed an agreement for China's Zhejiang Geely Holding Group (ZGH) to take a 49.9% equity in Malaysian carmaker Proton Holdings Berhad (Proton). DRB also sold its entire stake in Lotus Advance Technology to ZGH and Etika Automotive. The signing came 30 days after both parties signed a heads of agreement on the deal in Putrajaya.

DRB-Hicom Group managing director, Dato' Sri Syed Faisal Albar, said the signing was a historic moment for Proton, as the national carmaker moves to make inroads into the large ASEAN automotive market.

"ZGH, which also owns Sweden's Volvo Cars, The London Taxi Company and the Geely car brand, is the right partner for Proton. Their success with Volvo and The London Taxi Company, and of course their own Geely marque shows their capability both as a bona-fide carmaker and as a partner. With ZGH on board, Proton can now eye the huge ASEAN passenger car market with renewed confidence," he said.

Official data from ASEAN Automotive Federation shows that the region sold 2.1m passenger cars in 2016, up by 85% against 2007 sales. Proton will become the right hand-drive hub for Geely in ASEAN.

Syed Faisal said, however, the immediate focus was to re-claim the position as Malaysia's best selling car brand.

"Proton's status as a national car is secure with DRB-Hicom still a majority shareholder. Proton will now focus their efforts with ZGH to gain market share domestically. With the joint capabilities of both companies, I am positive that we will be able to impact the market positively, by coming out with products that meet market preferences in terms of design and quality."

With the sale of Lotus, DRB-Hicom has exited the sports car segment. Syed Faisal said the sale allows Proton to focus on passenger cars which is a larger market. Proton had acquired the British marque in 1996 and many of its cars benefited from tuning by Lotus.

ZGH chairman Li Shufu was also positive on the agreement, and hopes the cooperation will yield success.

"Proton is an iconic national brand of Malaysia. It is the symbol of Malaysia's national achievement and industrial spirit. We hope that through our cooperation with DRB-Hicom, Proton will be transformed into the number one independent automobile brand in Malaysia and one of the top three in southeast Asia.

"For Lotus, we will increase new product launches and capacity to fully release its brand appeal. Proton and Lotus will create synergies for ZGH to position ourselves as a major player in the ASEAN market, which in turn will enhance our global position and help us achieve sales target of 3m units by 2020," Li said.

ZGH in 2010 acquired Sweden's Volvo Cars. The deal raised many eyebrows, especially in Europe but after heavy investments into the carmaker, in 2016 it recorded an operating profit of US$1.25bn, the highest ever since its formation in 1927.

The London Taxi Company is also being turned around, and ZGH has committed US$370m towards producing an electric version of the iconic London black cabs. The move is to comply with new environmental requirements for London, in a move to reduce air pollution in the city.

In its home country, the Geely marque sold 760,000 cars in 2016, double the 2015 volume.