GENERAL Motors and Daewoo have entered into talks to discuss a possible strategic alliance, which could see the American giant take over the struggling Korean company. At the very least, it is expected that a strategic alliance will result in the two manufacturers sharing parts, platforms and technology. GM already has similar alliances with Isuzu and Saab, and its alliance with Suzuki is expected to lead to GM developing and building its first car in Japan.

A GM spokesman said: 'GM and Daewoo signed a 'memorandum of understanding' on August 6 to intensify discussions towards reaching an agreement to form a strategic alliance. GM believes this represents the renewed interest both parties have with regard to the pursuit of greater business opportunities.'