On the question of whether the General Motor's move to acquire Daewoo is correct or not, many market analysts have labeled it as yet another move to pick up cheap assets opportunistically rather than it having anything to do with a coherent strategy in Asia. However, few others say that the latest move fits into the Detroit auto-major's scheme of things, as far as its Asia plan is concerned.
General Motors made it finally. After wandering across paths of uncertainties, the auto giant from Detroit, at last, reaches its destination - "The Great Universe", Daewoo in Korean. The period of tough negotiations and anxieties was over on September 20, 2001, with the Detroit auto major finally grabbing its prized catch (?) - Daewoo Motors, a troubled auto-maker and a part of the yesteryears' Chaebol _ The Daewoo Group. The takeover deal came to an end with the GM signing a Memorandum of Understanding with the Daewoo's creditors for setting up a joint venture. This comes as a relief to all the concerned parties, including the Korean Government, which has been trying hard to get rid of the troubled enterprises by pushing the FDI reforms in the country.
The deal, which is a part of the US auto giant's Asia Strategy, eventually allows it to break into the closed but lucrative South Korean auto market. It also gives the Detroit car-maker a healthy 30 percent share in Asia's second largest auto market. Besides, an access to a Company, which makes high-quality, low-cost cars that sell across the Asian markets. Furthermore, it would also give the Detroit Company a new gateway to China, which it sees as one of the key markets for its future growth. The Korean auto-maker currently produces two million vehicles a year at its 11 plants located at various locations at home and abroad. The holding company is expected to have annual revenues of $5bn. Notwithstanding such mega plans, one thing is for sure: before the Detroit car company starts its dream journey in Asian markets afresh, it would have to jump certain hurdles, which is not going to be a mean task indeed.
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