Hyundai Considers Joint Bid for Daewoo Motor with Foreign Partner

Strategic Insights -

Hyundai Motor, Korea's largest carmaker, is considering making a joint bid for Daewoo Motor with a foreign partner. The move comes as Ford Motor, the US carmaker, is also preparing to compete to take over insolvent Daewoo Motor. Hyundai has a long-standing partnership with Mitsubishi Motor of Japan, but has not named any potential partners for the joint bid. Analysts believe Hyundai's primary interest in acquiring Daewoo's overseas plants, particularly its successful Polish operations. Meanwhile, Hyundai has faced challenges in its foreign operations, with creditors threatening to foreclose on its southern Africa franchise, Hyundai Motor Distribution, which owes over $127m.

Key Takeaways:

  • Hyundai Motor is considering making a joint bid for Daewoo Motor with a foreign partner.
  • Ford Motor is also preparing to compete to take over insolvent Daewoo Motor.
  • Hyundai has a long-standing partnership with Mitsubishi Motor of Japan.
  • Analysts believe Hyundai's primary interest in acquiring Daewoo's overseas plants, particularly its successful Polish operations.
  • Hyundai has faced challenges in its foreign operations, with creditors threatening to foreclose on its southern Africa franchise, Hyundai Motor Distribution.
  • Hyundai has expressed interest in building strategic alliances with big foreign carmakers to avoid being marginalised in the consolidation of the global car industry.
  • Trade unions at Hyundai and Daewoo have warned they would go on strike if Daewoo is sold to an overseas buyer due to worries over job cuts.
  • Hyundai would probably be forced to accept a minority stake in a Daewoo joint venture with a foreign partner due to government concerns that it would become a monopoly car manufacturer.

Statistics:

  • Hyundai Motor has a 75% market share in the closed Korean car market.
  • Daewoo Motor owes over $127m to creditors, who are planning to sell it through an auction by the end of June.
  • Bidders for Daewoo Motor will submit letters of intent by the end of January and bidding proposals by early March.
  • Hyundai has a long-standing partnership with Mitsubishi Motor of Japan.

Sources:

  • Reuters, January [date missing]
  • The Financial Times, 15 January 1999