Tata vies for Daewoo Romania

The Tata group may take on global automobile giants such as Ford and Renault-Nissan for in an attempt to buy Daewoo Automobile Romania, the privatisation of which the Romanian government has put on the fast track.

Sources in the know of the development said the Romanian government last week constituted a commission to devise an expeditious and transparent auction and Tata group would soon begin examining the company.

"A satisfactory examination will lead the Tata group to place its bid," they added. Tata Motors will be the group's investment vehicle. However, a Tata Motors spokesperson refused to comment.

Industry watchers said bidding for Daewoo Automobile Romania, which can produce 100,000 cars, 150,000 engines and 200,000 trans-axles, would heat up because of interest from global automobile giants and the Tata group, which is in the middle of a bidding war with Brazil's CSN for the Anglo-Dutch steel-maker Corus, could have to bid aggressively.

Daewoo Automobile Romania makes a range of Daewoo vehicles like the Matiz, Cielo, Nubira and Tacuma, and 1.5 litre petrol engines.

It was established in 1994 as a joint venture between the Daewoo group (51 per cent equity) and the government of Romania (the rest). Daewoo was bought over by General Motors in 1999, but the US giant did not take over the Romanian venture.

Recently, the Romanian government bought out Daewoo's stake for $50 million and restructured the $10 million of the company's debt.

The Tatas are India Inc's most aggressive buyers abroad. Tata Tea recently bought a minority stake in Energy Brands Plc .

Tata Motors last year acquired Nissan's South Africa plant for an undisclosed amount. The year before, it took over Daewoo Commercial Vehicles for $102 million.