KUALA LUMPUR (May 25): It is a dawn of a new era for Proton Holdings Bhd after DRB-Hicom Bhd proposed to sell a 49.9% stake in wholly-owned Proton to Zhejiang Geely Holding Group Co Ltd as Zhejiang Geely is an established car manufacturer.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said in a statement today Zhejiang Geely would be able to boost Malaysia's national car manufacturer Proton's sales and bottom line.

"I am sure this is a development long awaited by 350 parts and components manufacturers and support and services-related vendors under the Proton's ecosystem.

"Last year, Proton introduced four new models, and we hope to see continuous improvement in its models as a result of the facilitation to be provided by Geely. The partnership with Geely will mark the beginning of a new era for Proton. It is still a long road ahead but I believe this is a step in the right direction," Mustapa said.

Yesterday, DRB-Hicom said in a statement the company and Zhejiang Geely signed the heads of agreement in Putrajaya for the stake sale. DRB-Hicom said it expected to sign a definitive agreement with Zhejiang Geely this July. Under the deal, DRB-Hicom said Proton would also sell a 51% stake in wholly-owned British car maker Lotus to Zhejiang Geely.

According to DRB-Hicom, Zhejiang Geely, which owns Volvo Car Corp and The London Taxi Co, is one of the leading passenger vehicle manufacturer in China. Zhejiang Geely's global facilities include 16 manufacturing plants, seven design studios and five research and development centres, DRB-Hicom said.