SEOUL - General Motors said on Friday its wholly-owned Australian unit, Holden Ltd., would hold the key assets of South Korea's Daewoo Motor Co., in a venture that will become a springboard for GM's ambitions in Asia.
GM said on Thursday the transfer of Daewoo Motor assets had been completed, leading to the creation of the spin-off -- GM Daewoo Auto & Technology Co.
GM, through Holden, invested $251 million for a 42.1 percent stake in the spin-off, while state-run Korea Development Bank holds a 33 percent stake for $197 million.
"The move makes sense because of the location of Holden within the Asia-Pacific region," GM spokesman Rob Leggat said.
Holden said its managing director Peter Hanenberger would be a director on the GM Daewoo board.
Daewoo's production capacity of 600,000 vehicles a year will boost GM's tiny market share in South Korea, Asia's second largest market with annual sales of 1.6 million automobiles.
It also will launch the world's largest automaker's assault on other markets in the region, especially China, one of the world's fastest growing.
Holden said it has set up a separately run distribution company, GM Daewoo Australia, which will be the exclusive distributor of Daewoo cars in Australia.
"We will retain Daewoo as a separate brand in Australia and New Zealand for the foreseeable future," Hanenberger said in a statement.
Holden said it was looking to restore Daewoo sales in Australia to more than 20,000 units a year.
"Holden has entered these investments to support GM's regional plans and enhance our export opportunities, while enhancing our revenues within Australia," Hanenberger said, adding Holden had a strong balance sheet with almost no debt.
Suzuki Motor Corp. agreed in June to take a 14.9 percent stake in GM Daewoo Auto & Technology Co. for $89 million. Shanghai Automotive Industry Corp. Group (SAIC), China's third largest automaker, has said it would take 10 percent for $59.7 million.
GM Daewoo Auto & Technology includes three of Daewoo Motor's manufacturing plants, as well as nine overseas subsidiaries.