French automaker PSA Group gets its first manufacturing hub in Southeast Asia in a deal with Malaysia’s Naza Corporation Holdings.

They sign share-sale and joint-venture agreements establishing shared operation of the Naza Automotive Mfg. plant in Gurun, Kedah, 250 miles (400km) north of Kuala Lumpur.

The plant, operational since 2004, has a 50,000-unit annual production capacity.

It’s PSA Group’s second foray into Malaysia. It had been a candidate to be the foreign partner of national automaker Proton, but lost out to Chinese manufacturer Geely.

PSA and Naza will jointly produce PSA-branded cars for Malaysia and other Association of Southeast Asian Nations markets.

In a joint statement they say PSA will hold a majority stake in NAM’s business operations, and Naza Group will have sole responsibility for the distribution of Peugeot, Citroën and DS automobiles in the Malaysian market.

They also will explore distribution prospects in other ASEAN markets to address the potential 680 million customers in the region.

PSA’s investment in the NAM plant will see the implementation of its EMP2 modular platform dedicated to C- and D-segment vehicles.

Malaysian auto analyst Paul Tan reports PSA will hold 58% of the NAM operation. He says the first models to be produced at NAM will be the Peugeot 3008 this year, followed next year by the Citroen C5 Aircross.

Nasarudin Nasimuddin, Naza Corporation Holdings Group executive chairman and CEO, says the new partnership means there is enormous potential for the Kedah plant to be Malaysia’s leading automotive manufacturing hub.