Suzuki Motor has been confirmed as one of GM's partners in the deal. The company, which is 20 per cent owned by GM, is paying around £60m for a 14.9 per cent stake enabling it to jointly develop vehicles and share parts with the business. GM will hold 42.1 per cent and says another partner will take 10 per cent, with the balance held by financial organisations.
Nick Reilly, president of the new company, expects the courts to approve the deal by the end of August. “The corporation is being split into several parts and the assets have to be valued so there is lots going on in the background which have to be sorted out,” he says. GM plans to maintain the Daewoo brand in the UK but will withdraw certain models “which clearly did not work”.
GM Daewoo Auto and Technology has guaranteed to honour all warranties in the UK as the brand moves to a more traditional dealer network. Daewoo originally sold direct to consumers from its own sites and used Halfords fast-fit outlets to carry out servicing. It announced in October last year it was withdrawing staff from Halfords support centres, to be offset by expanding its own network.
“The previous Daewoo set up was not a viable proposition. But we want to ensure the brand is maintained and hope to have the network up and running soon after the closing of the deal maybe around September,” says Reilly.
The operation will not be part of Vauxhall in the UK although the company will look at synergies in terms of space and distribution. Priority for the new company is in the Korean domestic market where share has slipped badly although Reilly claims the deal has improved the outlook and reduced uncertainty.