SEOUL, April 30: US auto giant General Motors Corp. (GM) on Tuesday signed a deal to take over South Korea’s bankrupt Daewoo Motor Co.

The contract was signed in front of media by GM chairman John F. Smith and Jung Keun-Yong, governor of Daewoo’s key creditor Korea Development Bank (KDB).

The signing had been delayed twice due to protests by Daewoo Motor Sales Corp. workers and procedural matters.

GM will take over two of Daewoo’s three manufacturing plants in South Korea and another in Vietnam and will also acquire Daewoo’s nine sales subsidiaries in Europe.

But the US company will not take over Daewoo Motor Sales and wants to sign a new contract with the car sales firm.

Meanwhile, the acquisition of Daewoo Motor Co. by US auto giant General Motors Corp. on Tuesday signified the start of competition between foreign and domestic brands in South Korea’s auto market, analysts said.

“The local car market now has major international brands, meaning the end of (Hyundai’s) dominance over bankrupt competitors and the advent of perfect competition,” said Hyundai Securities analyst Kim Hak-Ju said.

The GM-Daewoo deal also marked the completion of a government drive to restructure the auto market, which was plunged into trouble after South Korea was hit by the Asian financial crisis in late 1997, he said.

Daewoo will be reborn quickly as a competitive entity under GM’s ownership, he said, forecasting a tough three-way race among Hyundai, GM and French firm Renault SA, which has acquired Samsung group’s bankrupt auto unit.—AFP