SHAH ALAM, Feb 6 —  Malaysian carmaker Proton Holdings Bhd is looking into a partnership to co-build Indonesia’s national car.

Proton signed a memorandum of understanding (MoU) with PT Adiputra Citra Lestari to further “business opportunities between both companies” in developing and manufacturing the proposed vehicle project.

The entails a feasibility study on specific areas of cooperation between the two companies, according to a news release by Proton after the MoU signing, which includes possibly developing and building the car in the republic.

Prior to the MoU signing, it was widely speculated that Malaysia’s national carmaker would enter into an arrangement with its Indonesian counterpart to develop an “ASEAN car”.

The Malaysian proposal picked up steam after Indonesian President Joko Widodo expressed interest in pursuing it last October.

Proton executive chairman Tun Dr Mahathir Mohamad said they expect the feasibility study to be completed within six months, after which the details of the deal will be finalised.

He noted that apart from the technology transfer by Proton, they are also looking at developing support industries for the joint venture such as vendors.

"Obviously there is benefit for Indonesia. The market for Indonesia is growing at 1.4 million cars (a year) now," he said at a news conference after witnessing the MoU signing.

Today's MoU was signed by Proton chief executive Datuk Abdul Harith Abdullah and his PT Adiputra Citra Lestari (PT ACL) counterpart Abdullah Mahmud Hendropriyono, and witnessed by Prime Minister Datuk Seri Najib Razak, Indonesian President Joko Widodo and Dr Mahathir.

Abdullah Mahmud is a known close associate of Joko, and was at one time the chief of Indonesia's national intelligence agency (BIN).

Proton, which was set up in 1983, became part of DRB-HICOM Bhd's automotive division in 2012 after the conglomerate paid RM1.2 billion to take over a majority stake held by sovereign wealth fund Khazanah Nasional.

The takeover came amid a stretch of consistent losses for the national carmaker, widely attributed to its bloated operations and expensive acquisitions that failed to make much of a return on their investment, such as the purchase of ailing British sports car manufacturer Lotus.

The company brief included in the news release described PT Adiputra Citra Lestari, or PT ACL, as a special purpose vehicle and "pioneer company" set up to build Indonesia's national car.

It also engages in investments in resources based on industrial infrastructure development.