Samsung, GM Launches Joint Venture

Seoul June 8, 2004; Kim Yon-se writing for the Korea Times reported that Samsung Card, which took over Samsung Capital in February, will set up a joint installment financing company with General Motors Acceptance Corp. (GMAC), a subsidiary of GM.

GMAC is the world¡¯s largest auto financing company and the name of the joint entity is GMAC Capital. Samsung Card will hold a 19.5 percent stake in the company and GMAC will hold 80.5 percent.

The capital service company will be established at the end of month with capital of 20 billion won, Samsung Card announced on Wednesday.

The new company will offer loans to customers who want to buy cars produced by GM and GM-Daewoo Auto & Technology and used cars on an installment basis. Robert M. Fall, head of the New Zealand branch of GMAC, has been named as the president of the joint venture in Korea.

U.S.-based GMAC¡¯s total assets reach $288.1 billion, around 38 times higher than that of Korean major capital service companies, such as Daewoo Capital. Last year, it posted $2.8 billion in net profits, 74 percent of the total earnings of the GM Group.

Yoo Suk-ryul, Samsung Card CEO, and Richard Clout, a CEO in charge of GMAC¡¯s international business, signed a contract to set up the joint company at the Shilla Hotel in central Seoul.

Samsung Card plans to move into the installment financing business after acquiring its affiliate, Samsung Capital.