Malaysia's Proton Holdings and its strategic shareholder Zhejiang Geely Holding Group (Geely) have signed a preliminary agreement to establish a new joint venture focused on new energy vehicles, according to reports in China.
Just over a year ago, Geely acquired a 49.9% stake in Proton from local Malaysian conglomerate DRB-HICOM which at the time controlled 100% of the first national car company's equity.
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Each partner will have a 50% stake in the new company which will also focus on increasing Proton overseas sales. Its exports have fallen to a trickle in recent years as it struggled to keep up with rising competition from other mainly Asian carmakers and with more stringent emissions standards worldwide.
Operational details of the joint venture, including production and local purchasing strategies, are still undefined but, as Proton increases its dependence on Geely products, its access to overseas markets will improve.
The Malaysian carmaker will also benefit from Geely's growing focus on new energy vehicles including electric and hybrid vehicles, allowing it to revitalise its image in overseas markets.
