Ford sole bidder for Romanian Daewoo plant

Ford Motor, eager to ramp up its production in the booming car markets of south-eastern Europe, on Thursday submitted the only bid for Romania’s Daewoo Automobile, a state-owned auto plant formerly run by the bankrupt South Korean group.

In a surprise development, Ford’s US rival General Motors did not submit a bid.

JC Russian Machines, part of the Russian Ganz Group controlled by billionaire Oleg Deripaska, had ex-pressed interest in the plant but also failed to submit a bid by Thursday’s deadline.

The plant, located about 200km west of the capital Bucharest in Craiova, has the capacity to produce 200,000 cars and 300,000 engines annually. The plant was built in 1977 as a joint venture between the Romanian state and Citroën. Daewoo Motor acquired it in 1995 but sold it back to the state last year after going bankrupt. The state paid €61m ($83m) to reacquire the plant. The size of Ford’s bid for the 72.4 per cent stake offered was not announced. The bid will be opened on Friday.

GM was widely believed to eye the plant for production of the Chevrolet Spark. The plant already produces the Daewoo Matiz, which is built from the same platform as the Spark under a previous alliance between GM and Daewoo Motor. GM facilities in Korea, also purchased from Daewoo, supply Craiova with components.

Marc Kempe, a GM spokesman, said his company remained committed to its plan to site a manufacturing plant in the region but said the risks outweighed potential benefits at Craiova.

Ford had no such doubts and appeared more intent than GM in recent weeks on acquiring the Craiova facility. In June, John Fleming, Ford’s European head, said the company needed to expand production as soon as possible to meet rising demand in Europe.

Ford produced 1.8m vehicles in Europe in 2006, 10 per cent more than the company’s normal production capacity.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.