Malaysian auto firm Naza Corporation today said it will manufacture a local variant of French carmaker Peugeot's 206 model at its plant in Kedah.

Naza and Peugeot signed a memorandum of understanding in Paris on Wednesday "which will lead to the manufacturing and distribution of a local variant of 206, one of the most successful cars of the Peugeot brand," it said.

Production of the new vehicle is scheduled to start in early 2006 at Naza's plant.

The new car, with a right-hand drive, is to be launched and distributed under the Naza brand in the domestic market and exported to countries in the 10-member Association of Southeast Asian countries (Asean).

Peugeot and Naza have jointly appointed Cycle and Carriage Automobiles to provide after-sales support, it said.

Naza, which assembles and distributes vehicles under South Korea's Kia and Naza brands, last year opened the RM300 million assembly plant in Kedah which can assemble up to 50,000 units a year.