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Transportation equipment industry

Global Rivals Eye Daewoo Motor as General Motors Moves to Speed Up Negotiations

Strategic Insights

— 1 min read

As General Motors prepares to send a high-level negotiating team to discuss new proposals, its global rivals Ford Motor and DaimlerChrysler have expressed interest in acquiring Daewoo Motor, potentially leading to an international auction. This move follows the recent expiry of GM's exclusive negotiating rights to acquire the car manufacturing unit of the insolvent Daewoo group. The takeover of Daewoo Motor could grant any of the three foreign carmakers a significant foothold in Asia, where they have a weak presence. Analysts believe that Hyundai Motor, Korea's biggest carmaker, might also be interested in Daewoo Motor to prevent foreign competition, but Hyundai has denied any such intentions.

Key Takeaways:

  • General Motors plans to send a high-level negotiating team to discuss new proposals with Daewoo Motor's creditors, despite slow progress in negotiations.
  • Ford Motor and DaimlerChrysler have expressed interest in acquiring Daewoo Motor, potentially leading to an international auction.
  • The takeover of Daewoo Motor would grant any of the three foreign carmakers a significant foothold in Asia, where they have a weak presence.
  • Hyundai Motor, Korea's biggest carmaker, might be interested in Daewoo Motor to prevent foreign competition, but Hyundai has denied any such intentions.
  • Daewoo Motor has liabilities of Won18,600bn (Dollars 16.4bn) and assets of Won12,900bn.
  • DaimlerChrysler has expressed interest in acquiring Daewoo-owned Ssangyong Motors, which makes cars using Mercedes technology and produces vans sold under the Mercedes brand in south-east Asia.
  • Analysts believe that an auction would be more beneficial for creditors, as competition for the carmaker increases, but would require foreign creditors to agree to a work-out programme.
  • Domestic creditors are seeking to have foreign banks write off 67% of Dollars 805m in unsecured loans to the company.

Statistics:

  • Won18,600bn (Dollars 16.4bn): Daewoo Motor's liabilities.
  • Won12,900bn: Daewoo Motor's assets.
  • 67%: The percentage of Dollars 805m in unsecured loans to Daewoo Motor that domestic creditors are demanding be written off.
  • 10%: The minimum share of the Asian market that both GM and Ford are targeting.
  • 75%: Hyundai's market share in Korea after its acquisition of Kia Motor.

Sources:

  • Yonhap (Korean news agency)
  • Korea Development Bank (KDB)
  • General Motors
  • Ford Motor
  • DaimlerChrysler
  • Hyundai Motor
  • Reuters

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