The Hindu : Business : GM to decide on Daewoo deal shortly

Online edition of India's National Newspaper
Tuesday, May 10, 2005

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Business

GM to decide on Daewoo deal shortly

Staff Reporter

NEW DELHI: General Motors India on Monday said a decision on buying the bankrupt Daewoo Motors India assets would be reached within a few weeks. "However, we are moving ahead with our alternative plans, including setting up of greenfield or brownfield projects or even expanding the current capacity of the Halol plant, if the deal gets delayed further," said Rajeev Chaba, the newly-appointed President and Managing Director of GMI.

Stating that creditors had offloaded the non-performing assets to a special purpose vehicle, Asset Reconstruction Company India Ltd (ARCIL), Mr. Chaba said GMI was hoping some "natural deal'' as the matter has already got delayed for over an year due to legal issues. "But we cannot wait for more than two months as we have some alternative plans to realise our future goals,'' he added. Interestingly, GM India has plans to use Daewoo assets, particularly the car manufacturing plant at Noida to expand in India.

Stating that the company was keeping all its options open to make inroads into the lucrative small car segment and planned to sell over 1.5 lakh units by 2007, Mr. Chaba said for this the company needed to expand the manufacturing facility for which alternative plans had been chalked out. GMI has already commissioned its newly-expanded 60,000 units plant. It is further increasing it to 80,000 by June 2006, with a fresh investment of Rs. 50-70 crores.

Mr. Chaba said the company had no plans to introduce new brands while its growth strategy would revolve around Opel and Chevrolet brands. But they might launch luxury models like Cadillac and Hummer later. GMI was expanding its R&D facility and planned to recruit 50 more scientists in the next one year.

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