China's largest private carmaker Geely Auto said on Tuesday that it is buying a 34.02 percent stake in French auto manufacturer Renault Group's subsidiary in South Korea for about $207 million, as part of its efforts to explore overseas markets.

The purchase reflects the two companies' "strong confidence in the South Korean market's strong potential", they said in a joint statement on Tuesday. Renault will remain the majority shareholder in the subsidiary called Renault Korea Motors.

South Korea is the world's fifth-largest car-producing country. Last year, it produced 3.46 million vehicles, with 1.62 million vehicles exported, according to the country's Automobile Manufacturers Association.

Geely and Renault said they will introduce new products to the subsidiary to grow its market share in the local market, which has long been dominated by Hyundai and Kia, and explore export opportunities as well.

The move came after Geely Auto's parent company Geely Holding Group and Renault inked a deal earlier this year to produce hybrid vehicles and conventional gasoline-fueled vehicles in South Korea.

The models will be built based on Compact Modular Architecture, developed by Geely's research facility in Sweden. The group's other brands, including Lynk & Co and Volvo, use the CMA as well.

Renault will primarily contribute its expertise in design and customer experience.

The vehicles will be produced at the current Renault Korea Motors facility in Busan, South Korea, with volume production forecast to begin in 2024, and will be marketed via its local dealership network.

Analysts say the deal with such a global carmaker as Renault is a sign of Geely Auto's technological competitiveness.

The French company has five brands, including the flagship Renault name as well as Dacia and Lada. It sold 2.7 million vehicles in 2021. It also has an alliance with Japanese carmakers Nissan and Mitsubishi Motors.

Geely Auto's deal with Renault also marks the latest step for the Chinese carmaker in its globalization campaign and may facilitate the entry of its brands into European markets.

Lynk & Co, Geely Auto's premium marque brand, has set up showrooms in countries including Sweden.

Headquartered in Hangzhou, Zhejiang province, Geely Holding is one of the most successful Chinese carmakers in terms of a global footprint since it acquired Volvo from Ford in 2010.

It has a joint venture with Mercedes, owns London Electric Vehicle Co as well as a majority stake in British carmaker Lotus. It has also helped rejuvenate Malaysian carmaker Proton, in which it bought a 49.9 percent stake in 2017.

Earlier this year, Geely Auto's electric brand Zeekr partnered with Waymo to develop an electric vehicle model for the Alphabet subsidiary's robotaxi fleet in the United States.

The model is being designed and developed at Zeekr's research and development facility in Gothenburg, Sweden.

When they are delivered, Waymo will integrate its fully autonomous solutions into the vehicles.

Geely Holding as a group sold over 2.2 million vehicles in 2021, with Volvo sales reaching 698,693 units globally and Geely Auto delivering 1.33 million units.

Geely Auto is planning to launch 13 models this year, most of which will be hybrids and electric vehicles, which will help it to achieve a sales goal of 1.65 million units this year, up 24 percent from 2021.