Suzuki Motor Corp. is expecting to acquire an equity stake in a company to be established by General Motors Corp. that will take over the operations of bankrupt South Korean firm Daewoo Motor Co., industry sources said Wednesday.
Suzuki is to put up some 10 percent of the capital for the new company, tentatively named GM-Daewoo, the sources said.
Suzuki apparently hopes the capital affiliation will promote joint development of small cars with GM-Daewoo and provide a mutual supply of core auto components.
Suzuki is also expected to use Daewoo’s sales network to gain a larger market share in South Korea.
The Nihon Keizai Shimbun reported that Suzuki will probably provide between 10 billion yen and 15 billion yen to buy a 15 percent stake in the new company.
Top officials of GM and Daewoo will meet their counterparts at Suzuki in Japan next week to iron out the details, the newspaper said.
However, a Suzuki spokesman denied the report, saying, “Nothing specific has been decided on Suzuki’s capital participation in Daewoo.”
GM signed a contract in late April for a 42 percent stake in GM-Daewoo.
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