The Hindu Business Line : GM opts out of bidding for Daewoo

GENERAL Motors on Friday said that it is no longer interested in pursuing the acquisition of the passenger car assembly assets of the former Daewoo Motors India Ltd.

The company's announcement comes after months of waiting for a debt settlement between the Government and the lenders to the erstwhile subsidiary of the Korean company. The settlement would have set the sell-off process for the assets rolling. General Motors had been looking at the assembly unit for the manufacture of small cars for the Indian market.

Committed to small car: However, Mr P. Balendran, Vice-President, General Motors India, said that the company was still committed to bringing a small car to the country and was studying several strategic options for the same. He, however, declined to specify what these options were.

Commenting on the decision to pull out of the bidding process for Daewoo, Mr Rob Leggat, Director, Communications, for GM Asia Pacific, said, "A number of factors led GM to this decision, including the need for GM to step back and re-evaluate our long-term requirements in India. The company is exploring a number of strategic options in India. GM does not want to take a short-term approach to India".

The Daewoo plant in Uttar Pradesh had capacity to make 85,000 cars a year and produced the popular Matiz compact and the Cielo and Nexia sedans before shutting down after its parent company collapsed in November 2000.

GM would now focus efforts on its Halol plant in Gujarat, Mr Leggat said.

In March last year, GM made an offer to buy the car assembly unit of Daewoo Motors India from its principal lenders, ICICI Bank Ltd, Industrial Development Bank of India Ltd and Export and Import Bank of India. The assets of Daewoo India were put on sale in late 2002 as the carmaker failed to repay debt of around Rs 1,000 crore to financial institutions and the Customs Department.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page