Daewoo Signs Mou For Matiz Imports
Director-general of foreign trade N L Lakhanpal and managing director of Daewoo Motors (India) S G Awasthi signed a memorandum of understanding (MoU) for import of 60,000 kits by the Korean car maker here yesterday.
The signing of the MoU paves the way for the launch of Daewoo's small car Matiz in India.
The company said its imports in 1998-99 would be around $98 million and it would bring in further investment of Rs 350 crore. It has already invested Rs 3,259 crore in the country.
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The MoU is company-specific and Daewoo will follow the indigenisation schedule for Matiz in India. The MoU includes details on investment, foreign equity, manufacturing facilities, production plans, indigenisation schedule, import plans, neutralisation of foreign exchange and performance detail. The company has not specified further models it plans to introduce in the future.
During discussions the company said it would indigenise more than the requirement and expects to export more than the $98 million required under the policy to neutralise foreign exchange spent. Daewoo executives said the Cielo was already 70 per cent indigenised.
This is the third MoU being signed between the directorate and car manufacturers operating in India under a new policy announced last year. Honda Motors and Fiat are the other two signatories.
The government has substantively relaxed indigenisation norms for car companies by changing the formula for calculating indigenisation. Earlier, if a vendor imported 10 per cent of its inputs, it would be counted for calculating indigenisation.
Now if a vendor imports less than 50 per cent, its import content is not added for calculating indigenisation, thus making it easier for car companies to meet the new indigenisation norms.
Fiat has been granted a licence for import of 36,000 semi-knocked down (SKD) and completely knocked down (CKD) kits for making cars by the directorate. The company said it would produce 36,000 cars by 1999-2000 and its c.i.f. imports would be Rs 700 crore till the same year.
Sources pointed out that imports by Daewoo would be much higher than Fiat at around Rs 421 crore in 1998-99 against Rs 700 crore estimated by Fiat till 1999-2000.