KUALA LUMPUR (May 24): DRB-Hicom Bhd is selling a 49.9% stake in wholly-owned Proton Holdings Bhd to China-based Zhejiang Geely Holding Group Co Ltd to rejuvenate Malaysia's national car manufacturer Proton.

In a statement today, DRB-Hicom said it and Zhejiang Geely signed a heads of agreement in Putrajaya today for the stake sale. DRB-Hicom said it expects to sign a definitive agreement with Zhejiang Geely this July.

Under the deal, DRB-Hicom said today Proton would also sell a 51% stake in wholly-owned British car maker Lotus to Zhejiang Geely.

"The deal will enable Proton to tap into (Zhejiang) Geely Holding's vast range of platforms and powertrains, and will also enable Proton to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in south-east Asia," DRB-Hicom said.

DRB-Hicom said Zhejiang Geely would gain access into key markets in the Association of Southeast Asian Nations region via its stake in Proton.

According to DRB-Hicom, Zhejiang Geely would also have access to Proton's research and development (R&D) besides manufacturing presence in the region.

DRB-Hicom group managing director Datuk Seri Syed Faisal Albar said in the statement: "Our intention was always to ensure the revitalization of the Proton nameplate. It was Malaysia's first national car brand and has more than 30 years of history. This deal will be the catalyst to elevate a brand that Malaysians resonate with."

He said the Proton brand would remain and that the company would grow significantly with foreign strategic partner Zhejiang Geely on board.

Zhejiang Geely is an established international car manufacturer.

According to DRB-Hicom' statement, Zhejiang Geely, which owns Volvo Car Corp and The London Taxi Co, is one of the leading passenger vehicle carmakers in China.

Zhejiang Geely's global facilities include 16 manufacturing plants, seven design studios and five R&D centres, according to DRB-Hicom.