Suzuki is negotiating to take an equity stake of about 15% in the company that will take over operations from Daewoo and in which General Motors will take a majority interest, The Nihon Keizai Shimbun said, according to a report in the Wall Street Journal (WSJ).
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The WSJ said the investment should allow GM partner Suzuki to jointly develop subcompact cars with Daewoo and exchange engines and other key components.
The tie-up would also enable Suzuki and Daewoo to establish themselves as GM group firms that produce subcompacts for Asian markets, the WSJ report added.
The WSJ said details such as ownership percentages and specific business cooperation would be worked out as early as next week, when senior GM and Daewoo executives visit Suzuki headquarters in Shizuoka Prefecture.
Suzuki is expected to invest 10 to 15 billion yen ($80.4 million to $120.6 million) in the new company, and expects to share subcompact platforms, engines and transmission systems while gaining mass production benefits by jointly developing cars with common key parts and selling them through their respective sales channels, the report said.
Meanwhile, other reports from Japan suggested that Fuji Heavy Industries, which sells a rebadged version of GM#;s Opel-designed, Thai-built Zafira minivan through its Subaru dealer network, has also been invited in on the deal.
