Geared up

New Delhi, May 23: GM Daewoo Auto & Technology Co is interested in buying the engine and transmission units of Daewoo India’s closed car plant and hopes to clinch the deal this year, said a senior official.

“We plan to buy these assets and are having a look at the engine and transmission production line,” Jim Raymond, executive director, sales marketing servicing, GM Asia Pacific, told The Telegraph.

Raymond said acquisition of these production facilities would help General Motors India synergise local operations and be cost-competitive, when it re-introduces the Matiz model in India, scheduled early next year.

“The engine and transmission facilities are brand new while the assembly line is good and needs little work,” Raymond said. “But, most of the work has to be done in the paint shop, which requires an investment.”

General Motors (GM), which is currently conducting due diligence of Daewoo’s assembly line assets located in the outskirts of the city, expects the process to be completed within the next two to three months.

The Indian unit of the ailing South Korean firm is now in the process of liquidating assets, which was excluded, when GM bought part of Daewoo Motors, including two plants in South Korea, one plant in Vietnam and a number of operations in western Europe and Puerto Rico.

GM, the world’s biggest automaker, and partners acquired a majority stake in Daewoo Motor last year for Rs 1129.5 crore ($251 million) creating GM Daewoo Automotive & Technology Co.

Raymond said GM plans to nearly double Daewoo India’s manufacturing capacity to 1.5 lakh units from 85,000, and “may be a little over that”, which would be produced in three shifts.

Currently, General Motors India manufactures the German-engineered Opel Astra, Corsa, Optra and Swing models at its Halol plant in Gujarat. But, this facility does not make engines.

“The complexities of the previous ownership is the core issue and these legalities — approval of judicial and government authorities and creditors — has to be sorted out,” he said.

The principal creditors of Daewoo India include ICICI Bank, Industrial Development Bank of India and Export-Import Bank of India.

General Motors bought the entire stake of its Indian partner, the C. K. Birla group in 1999. Birla and General Motors were equal partners in General Motors India, which is now a wholly-owned subsidiary of General Motors Corporation.