GM, Daewoo sink differences to explore vehicle projects

GM sold its stake in the Korean automaker in 1992, ending along relationship under which Daewoo built the small Pontiac LeMans car for sale by GM in the United States. The two companies at the time cited differences over sales strategies, overseas markets and investment decisions.

GM in a statement emphasized the discussions "would be exploratory in nature and did not presume a given outcome." Nevertheless, it does preclude GMfrom discussing vehicle projects with other Korean automakers and focuses such efforts on Daewoo.

"We’re not going to talk to any other companies on the vehicle side of the business," Michael Meyerand, a GM spokesman in Detroit said. "It does not preclude us from working with other parts makers." The agreement, signed in Seoul, allows the two companies to exchange some confidential information that will enable them to explore further business transactions both in South Korea and abroad.

GM also said that 10 of Daewoo Motor’s service centers would provide service to GM’s Korean customers, including owners of Buick, Chevrolet, Pontiac and Cadillac models. GM sells only about 1,000 cars annually in South Korea, a market that Western automakers view as largely closed to imports.

Although the agreement could extend to Daewoo’s vehicle plants in Eastern Europe, Meyerand said the discussions between the two companies are "probably a little more focused on Asia."

GM wants to become a significant player in theSouth Korean car market and intends to establish a much stronger distribution network there. But Meyerand said GM will not rush to set up new dealerships in South Korea.