| out of favour
New Delhi, Nov. 19: In its heydays, the Matiz turned many heads. Now, it may leave you holding yours in despair.
With a Mumbai court ordering the auction of Daewoo Motors India’s assets, General Motors has let it be known that with Daewoo’s dissolution, its commitment to providing spares for the Matiz will end.
Daewoo’s Surajpur plant in Uttar Pradesh will naturally not be making the Matiz after the sale of the factory; in any case, it had virtually stopped doing so some six months back. Combined, this could well mean bleak days ahead for Matiz owners.
General Motors said it will not participate in any auction for the Daewoo plant nor does it have any plans to bail out the troubled plant.
GM-Daewoo Auto and Technology company—the new joint venture company operating in Korea—owns the Changwon plant which exclusively supplies CKD kits for the Matiz and spare parts for the car. GM would have been routing its Matiz spares through that company if it had remained interested in Matiz’s fate here.
“GM India does not have any orders to get involved in the deal. Moreover, GM Korea or America are not interested in acquiring the Indian plant which has liabilities of more than Rs 1,100 crore. Once the plant is put up for auction and sold, we will not take any responsibility for supplying spare parts in India. The original understanding was with Daewoo India but it will not be continued with anybody who takes up the plant,” GM spokesperson P. Balendran said.
Daewoo sources said the court order had come as a surprise to them as also to the financial institutions which were looking for suitable buyers themselves to recover their loans.
“When Daewoo India had reported erosion of half of its capital base, ICICI had got the initial receivership order. Along with ICICI, others including IDBI and Exim Bank will have the first say on Daewoo properties worth around Rs 600 crore. But they were looking for individual buyers. So this auction order has come as a surprise,” company sources said.
However, Daewoo’s stand on the order is not yet clear as senior officials will only speak when Daewoo Korea responds to these developments.