Chery Automobile is competing with three global carmakers to buy an ailing Daewoo plant in Romania as a way to enter the European Union market, an official newspaper said at the weekend.
Daewoo Motors bought the factory in Craiova, 280km west of Bucharest, in 1984, investing US$800 million for a production capacity of 200,000 vehicles a year.
When General Motors took over the bankrupt Daewoo Motors in 2002, it left out some overseas assets, including the Craiova plant. It has since been producing cars through an agreement with GM but the licence expired in October last year. The plant has been producing the compact Matiz under a new licence from GM-Daewoo.
The Romanian government owns 49 per cent of the equity in the plant while Daewoo Motors' creditors own the remainder.
The Economic Observer said that Chery wanted to bid for the plant to give it a foothold in Europe, with Romania due to join the EU next year enabling the carmaker to avoid tax and other trade barriers that the EU is likely to put up against the future flood of Chinese-made cars.
Chery officials were unavailable for comment at the weekend.