LONDON - Hyundai Motor Co.'s looming takeover of Kia Motors Corp. is being greeted enthusiastically by Korean auto executives because it keeps the country's motor industry in national hands.
Ford Motor Co., which with affiliate Mazda Motors Corp. already owns 17 percent of Kia, had been expected to be the successful bidder.
Its offer was rejected as too low.
Ford buys the Kia-made Aspire for sale as a Ford in overseas markets. When new shares in Kia are created as part of the Hyundai deal, Ford's share will shrink to about 2 percent.
Daewoo Motor Corp. and Samsung Car Co. were the other bidders; both demanded higher debt write-offs than Hyundai. It proposed that creditors swallow some $5 billion in Kia debt, or about half of the total outstanding.
'This is the best possible outcome; it keeps Ford and GM out (of Korea), and pushes Samsung out of the car industry,' said Pat Farrell, Daewoo U.K. Ltd.'s director of sales operations, about the auction.
'Buying Kia would have been an unwelcome distraction' for Daewoo, Farrell said. 'Now we're clear to buy Asia Motors,' Kia's truck unit.
The purchase of Asia Motors would strengthen Daewoo's commercial-vehicle business with Britain's LDV and FSL in Poland. Daewoo is developing a new family of light trucks at its technical center in Worthing, England.
Meanwhile, Lee Chi-Sam, director of Hyundai Motor Europe, said Ford and Hyundai now might benefit from some form of joint venture.
Assembling cars for Ford in Korea, where the new company will have excess capacity, is one possibility. Kia has two factories: a modern plant on the west coast at Asan Bay, where Hyundai also has a plant; and one at Sohari near Seoul, which is thought to be the most likely to be closed.
Hyundai Chairman Chung Mong-Gyu has said in Korea that he plans to keep the Kia brand -the company had its best-ever sales month in the United States in September, beating Hyundai - and maintain its supplier relationships.
'There will be no change in distribution or importer relations,' Lee said.
If the bid is approved by creditors, Hyundai will realize its long-held ambition of becoming one of the world's top 10 carmakers.
Capacity will grow from 1.7 million vehicles to 2.5 million.