Geely Holding Group has inked a framework agreement with Renault to acquire a minority stake in the French carmaker's Brazilian subsidiary, with the Chinese auto giant making a significant step in expanding into the electric vehicle market in Latin America.

Geely and Renault will deepen their ties in developing and producing zero and low-emission cars through Renault do Brasil, the Chinese company's Hong Kong-listed unit Geely Automobile Holdings announced today, citing a deal penned yesterday.

Hangzhou-based Geely will gain access to localized production, service network, and distribution channels via its share in Renault do Brasil, Geely Auto added, without disclosing the final terms of the deal, which remains subject to customary closing conditions, and the size of the parent firm's stake in the Brazilian company.

"Geely Auto is not partnering with Geely Holding or providing financing to Geely Holding in relation to the proposed transaction," it noted, but added that it is exploring various options to participate in the deal "given the potential synergy from the collaboration with Renault and the significant potential of the Latin American market."

Shares of Geely Auto [HKG: 0175] jumped 5.2 percent to HKD17.76 (USD2.28) each as of lunch break today, after earlier soaring by as much as 6.9 percent.

Geely holds a about 39 percent indirect stake in Geely Auto and is considered a connected party to the listed company, with its founder and Executive Director Li Shufu maintaining close ties with both firms. Any future tie-up between Renault and Geely Auto must comply with the Hong Kong bourse's rules regarding notifiable and connected transactions.