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Tata Motors eyes Daewoo truck unit
November 05, 2003 14:58 IST
Last Updated: November 05, 2003 15:23 IST
Tata Motors, India's biggest truck and bus maker, will sign a memorandum of understanding with South Korea's Daewoo Commercial Vehicle Company later on Wednesday for a feasibility study to acquire the latter.
A senior Tata Motors official told PTI that the MoU would be signed to conduct "a due-diligence study" as part of the acquisition of DWCV, the truck-making arm of the beleaguered Daewoo Motor Company.
"This would take about 2-3 months. Only after that, we will decide on the price for DWCV," the official said over phone from Mumbai.
The official was commenting on reports from South Korea which stated that Tata Motors has agreed to buy DWCV for about $118 million.
The possible acquisition of DWCV is likely to help Tata Motors in its efforts to make the 'truck of the future', the prototype of which is likely to be ready by 2005-06.
It would also facilitate the company's planned foray into Southeast Asian markets like South Korea, Thailand and Malaysia as well as China, to truly boost its presence in foreign markets.
Tata Motors had already been selected as the "preferred bidder" for acquiring DWCV, which was incorporated under a reorganisation plan on November 1, 2002.
About 10 automakers are believed to have expressed interest in acquiring DWCV, the second largest commercial vehicle maker in South Korea with a marketshare of about 26 per cent.
DWCV produces heavy duty trucks in the 200-400 horse power range. The company has over 93 models in cargo, dump, mixer and tractor category.
It also makes tractors and utility vehicles and has an annual production capacity of 20,000 vehicles.
DWCV has been under court protection after its parent, Daewoo Motor Company, which declared itself bankrupt in November 2000, sold its passenger car business to a consortium led by the United States-based General Motors Corp last year.