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Chery not plans to buy Daewoo

(Shanghai Daily)
Updated: 2007-01-25 14:51

China'sChery Automobile Co Ltdis not in the race to buy Romania's troubled Daewoo Automobile Co Ltd - and that's official. News reports have said Chery is vying with General Motors Corp, Ford Motor Corp, and Tata Motors Ltd of India to buy Daewoo.

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Reuters quoted Romania's privatization agency, AVAS, as saying all four companies have submitted letters of intent to purchase Daewoo.

The Romanian government spent US$51 million for Daewoo Motors' 51 percent stake in the venture and US$10 million for debts from General Motors Corp. The world's largest car maker agreed to take over the South Korean bankrupted group but refused to buy back its 13 overseas branches last year.

The government relaunched the sale last month, and aims to select a buyer by June. A minimum yearly output of 300,000 units is required.

Wang Wei, spokesman from the general management office of Chery, yesterday denied the reports in a telephone interview. He said the company prefers overseas expansion via partnerships, rather than direct investment,mergers oracquisition.

"Compared with the three other potential buyers, Chery lags behind in capital, experience of consolidation and financial-risk control," said Zhong Shi, an independent automotive analyst.

Chery has set up six plants in five countries, including Russia, Indonesia and Iran. Chery made the investment through providing technology instead of capital investment.

Chery plans to export 70,000 units this year.

Wang said the company plans to build more overseas plans this year, but did not provide specific details.