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Daewoo to retain network

Daewoo Cars wants to retain its owned UK retail structure, regardless of which carmaker acquires the manufacturer. General Motors, in alliance with Fiat, this month started due diligence on the ailing South Korean carmaker.

Analysts have downgraded GM following poor European sales and concerns over the pricing issue.

A Daewoo spokeswoman said: "We took a risk in establishing the network but it is now returning a profit. I can't imagine why anyone would want to go back to the old way - it could prevent opportunities.

"By operating our own network, there is no reason why we can't retail other makes from our sites."

She claimed it was "business as usual" for Daewoo in the UK. Staff at the Worthing Technical Centre in West Sussex have now been paid, after a delayed creditors' meeting in South Korea put September wages on hold.

The potential acquisition of Daewoo breaks with GM's apparent preference for creating partnerships. The group paid around £600m to double its stake in Suzuki last month to 20%.

Vauxhall chairman Nick Reilly believes there are "definite advantages to working partnerships over outright acquisition".

He said: "We get the synergies of the alliance without having to invest millions of pounds on the acquisition. "We can also keep each company's brand and culture separate, which is hard to do in an outright acquisition, and not cannibalise sales."

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