The world's two biggest car companies appear to be in a bidding war over Korea's bankrupt Daewoo Motors.

Ford Motor Company has told Daewoo's creditors that it has a "strong interest" in buying the company, and Paul Drenkow, Ford's Asia Pacific executive director, says they will send a team to Korea next week to look at the company's situation in more detail.

That has upset General Motors (GM), which believed it had exclusive negotiating rights to buy the bankrupt Korean firm in the autumn.

Many Daewoo cars are modelled on older GM cars.

They two companies also battled for control of Korea's Kia Motors, but lost out to Korean multinational Hyundai.

Massive restructuring

Daewoo Motors is being sold as part of a restructuring of one of Korea's biggest companies. Daewoo collapsed at the height of the Asian crisis, with debts of over $70bn.

The banks who now own the company are hoping to break it up and sell off its more profitable subsidiaries in the next few months.

The car company is one of its most attractive assets, selling over 300,000 cars a year in Korea's protected market. The new owner will be able to expand sales in Asia, expected to be the fast-growing region for car sales in the next decade.

Daewoo has 12 plants in 11 countries, with a total capacity to produce 2.3m cars each year.

But both companies would prefer to acquire its assets, without having to take on its huge debts of $16bn.

Ford and GM, cash-rich from their huge North American profits, have both sought to strengthen their position in foreign markets in recent years. Ford bought Sweden's Volvo Cars and the UK's Jaguar, while GM owns a controlling stake in Saab.

Renault deal with Samsung

Both American car makers are also aware of an increasing global rivalry with European car makers, as the world car industry continues to consolidate.

Daimler has moved onto their home patch by acquiring Chrysler, the number three US carmaker, while Renault has gained effective control of Japan's number two auto company, Nissan.

Now Renault says it is interested in acquiring another Korean company, Samsung Motors, the smallest of Korea's four automakers.

The Samsung conglomerate, which owns the company, tried unsuccessfully to sell it to Daewoo last year before putting it into court receivership.

But analysts say that Renault may be taking on more than it can handle, with the Nissan acquisition still being digested.

"I can't say if this is a judicious move on the part of Renault, as Nissan is already a big enough meal to swallow," said Dider Orand of Wargay Societe de Bourse.

Creditors push for deal

Daewoo's foreign creditors, mainly Western banks, may yet scupper any deal to sell off Daewoo Motors because they are angry at the treatment they have received.

Daewoo wants the foreign creditors to agree a debt deal separately with the more profitable subsidiaries, like Daewoo Motors and Daewoo Electronics, before tacking the problems of the heavily indebted parent company.

But that could leave some creditors who hold debts only in the parent company facing huge losses, while others who only lent to Daewoo Motors stand to recover most of their money.

The Daewoo foreign creditors want a deal to get back 59% of their total lending, while Daewoo has only offered 36.5% if the deal is done on a group basis.

If the debt buyout proposals fail in talks in London and Hong Kong next week, the foreign creditors could force Korea's domestic banks - which own most of Daewoo - to abandon their restructuring plan