Hyundai to Stop Daewoo in Russia
South Korean Hyundai Motor officially confirmed interest to Uzbek UzDaewooAvto automobile maker, for which Russia is the key market. The deal is expected to be finalized by the end of this year. If completed, it is likely to end Daewoo's sales in Russia and Hyundai Accent’s production in Taganrog, the analysts speculate.
Hyundai Motor confirmed yesterday it is negotiating the purchase of UzDaewooAvto with authorities of Uzbekistan. The talks could be finalized by late this year, but it is yet unclear whether they will bear fruit.
Representatives of Uzbek government and UzDaewooAvto GD Kudrat Parpiev are in South Korean now, where they are going through a deal with Hyundai, Interfax reported. Hyundai also confirmed its interest to UzDaewooAvto. Off-the-record, this purchasing intent of Hyundai was announced in June, but the South Korean giant made no comments then.
UzDaewooAvto is 100-percent owned by Uzavtoprom, which is controlled by the authorities of Uzbekistan. The enterprise assembles Daewoo’s Nexia, Matiz, Damas and Chevrolet Lacetti by using components delivered by General Motors (GM) DAT. This year’s output is estimated at 142,000 cars.
If the deal is clinched, Hyundai will boost UzDaewooAvto’s capacity to 300,000 cars (vs. 200,000 today) and launch the assembly of its Verna and Click there. The deal budget hasn’t been disclosed yet. Last year, when Uzbekistan was buying out 50 percent in UzDaewooAvto from Daewoo Motor, the cost of the whole enterprise was estimated at $670 million.
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All the Article in Russian as of Oct. 16, 2006
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