RUESSELSHEIM, Germany -- General Motors Corp. expects an agreement for a planned $1.28 billion joint venture with Daewoo Corp. and Ukrainian carmaker AvtoZAZ to be reached within the next three months.
"We are in advanced discussions in the Ukraine and ready to move toward an agreement in the next three months," said David Herman, chief executive of GM's German unit Adam Opel.
Although Daewoo signed a preliminary agreement for the joint venture with the Ukrainian government last August, continued negotiations between Daewoo and the government have postponed the signing of a final pact.
The joint venture is expected to produce about 250,000 cars a year at AvtoZAZ's plant in Zaporizhia, of which Opel wants to assemble up to 25,000 of its Astra sedan models annually. Herman said an advance in talks would depend on the prior agreement between Daewoo and the Ukraine government.
The move would mark a further step in GM's ambition to generate growth in Eastern Europe and Central Asia as its Opel unit faces declining profit and falling market share in Europe while ambitions to expand in Latin America and Asia are checked by slowing economies.
"I think there is going to be a growing interest in Russia and it has become more emphatic since the Asian crisis," said Herman.
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