Tata Motors consummated its first overseas acquisition by taking charge of Daewoo Commercial Vehicle (CV), the Korean truck company, here today. 

The $250 million company will henceforth operate as a 100 per cent subsidiary of Tata Motors. In a ceremony marking the official handover of ownership, Kwang-Ok Chae, president and receiver of Daewoo CV, handed over the newly allotted shares of the company to Ratan Tata, chairman of Tata Motors at the Daewoo CV facility in Gunsan, South Korea. 

In his first visit to the Gunsan facility on Monday, Tata assured the employees of Daewoo CV that “Tata Motors will operate a Korean company in Korea, managed by Koreans, but will work as a part of a global alliance with Indians.” Chae will continue as president and representative director of Daewoo CV once the court receivership of Daewoo CV is completed. 

“We hope that Tata Motors will be able to steer Daewoo CV in the right direction, establish itself as world class manufacturer of heavy commercial vehicles and support us in the manufacture medium commercial vehicles,” Chae said. 

Tata said as the new owner, Tata Motors will make a commitment to Daewoo CV — to make it extremely profitable and help it grow both domestically and internationally. 

Daewoo CV recorded a profit after tax of $6 million in the year ended December 2003. 

Tata also did not rule out the possibility of selling its passenger cars in Korea, “Anything is possible. If there is a market in Korea for Tata cars then we will assemble them locally rather than importing them fully.” 

Ravi Kant, executive director, commercial vehicle, expanded on the same philosophy, “We will work towards improving Daewoo’s market share in the domestic market (currently around 26 per cent of HCV market) through upgraded products, increase exports using the Tata Motors’ network and introduce newer products in the market.” 

Ravi Kant also said the combined competencies of Daewoo CV and Tata Motors will be used to develop new products. 

Tata dismissed the popular notion that the Daewoo CV acquisition will lead Tata Motors way into China saying that they had no specific plans with China in mind and want to make Daewoo CV globally visible, if that involves China then they will do the necessary. 

Both Tata and Ravi Kant commented on the complimentarity of the Tata and Daewoo range of products but agreed that the Daewoo CV management will take any decision pertaining to sourcing vehicles or aggregates from India. 

The Daewoo products will continue selling under the Daewoo CV brand name till a decision is taken about the new branding of the products. 

Gunsan, a city located in the western province of Geon-buk, houses both the General Motors-Daewoo and Daewoo CV facilities. 

With the construction of an airport, seaport and an auto component foundation underway, the city is touted to be the business and logistical centre of north east Asia.