Ford Joins Hyundai and GM in Bid for Daewoo Motor

Strategic Insights -

Ford has joined the likes of Hyundai and General Motors in expressing interest in taking over Daewoo Motor, a move that is expected to intensify the competition for the troubled South Korean carmaker. Despite LDV's recent joint venture with Daewoo, the Birmingham-based van-maker's nerves may be on edge due to Ford's dominance in the van market. The joint venture, which has already invested £180 million, is expected to continue unaffected as it has almost completed its programme. However, the bidding war is likely to have significant implications for LDV's future prospects.

Key Takeaways:

  • Ford has hired Mr. Ulrich Bez, a former Daewoo Motor vice-president, as a consultant to evaluate the car-maker's potential.
  • The hiring of Mr. Bez sends a strong signal that Ford is serious about bidding for Daewoo Motor.
  • Ford is weighing up whether to join the closed bidding process outlined by the Korea Development Bank, which will select one company to negotiate a deal by July.
  • LDV's joint venture with Daewoo is expected to continue unaffected, with the companies having already invested £180 million in a new van and its variants for the European market.
  • Mr. Bez previously overhauled Daewoo's product line-up from 1993 to 1998, expanding the company's presence in Korea and new foreign markets.
  • Hyundai has expressed interest in taking over Daewoo's car plants, citing the need for automotive plants in Europe.
  • GM wants to buy all of Daewoo's domestic plants and some overseas facilities in Poland and elsewhere.
  • Daewoo Motor has 17 plants in South Korea and 11 other nations, collectively producing 893,000 vehicles last year.

Statistics:

  • Ford has invested £180 million in the joint venture with LDV to develop a new van.
  • Daewoo has invested slightly more than Ford in the joint venture.
  • Daewoo's Polish car plant produced 200,000 vehicles last year, mostly passenger cars for sale in the Polish market.
  • Daewoo holds about one-third of Poland's car market, which sells more than half a million vehicles a year.
  • Daewoo Motor is one of 12 ailing businesses of the Daewoo conglomerate under recovery programmes supervised by domestic creditor banks.

Sources:

  • "Ford Takes Stake in Daewoo", unnamed company (no date)
  • "Hyundai Hopes to Save Daewoo", unnamed source (no date)
  • Reuters, "Ford Joins Hyundai and GM in Daewoo Motor Bid" (January 10, 2023)
  • Financial Times, "Ford and Hyundai Weigh Up Daewoo Bid" (January 10, 2023)
  • Bloomberg, "Daewoo Motor's Struggles Worry South Korea" (January 10, 2023)