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FSOFabryka Samochodów Osobowych (FSO) means in Polish Passenger Car Factory.
The FSO plant was established in 1951 by the Polish state in the northern part (Zeran) of Warsaw to produce automobiles for postwar Poland. The first product of FSO was Warszawa (big limousine and kombi) manufactured under the Soviet GAZ-M20 Pobeda licence.
Later, the small Syrena model was introduced. In the early 1970s an agreement was concluded with the Italian Fiat company to build a new middle-class model, called Polski Fiat 125. This model was produced until 1991. The state-owned company developed a new middle-class model named FSO Polonez, equipped with a liftback body.
After 1989 the problems of insufficient technology emerged and in mid-1990s the company was bought by Daewoo Motors (that collapsed in 2001). As of 2005, the negotiations with a variety of foreign and Polish companies are held to keep the factory going as it needs further implements of technology and new models of vehicles. UkrAVTO holding is currently seeking to buy 20.36% of shares from the government; it also plans to relocate the equipment from the transmissions plant to the ZAZ.
The Daewoo Era
After the structural transformations of 1989, the Polish government sought to privatise the FSO by finding an appropriate partner in one of international automakers. Despite many attempts and negotiations, this was not the case for many years. The first full-fledged cooperation started in 1994, when an agreement with General Motors was signed to assemble Opel Astra in Żerań. Nevertheless, the following year FSO was actually sold to the Korean Daewoo Motors, which was at that time independent of GM and actually competing with it. The company was then renamed Daewoo-FSO.
At first, Daewoo used FSO to perform assembly of models such as Daewoo Nexia and Daewoo Espero. In 1997, the assembly and then full-fledged production of Daewoo Lanos commenced, followed in 1999 by the Daewoo Matiz. Other contemporary Daewoo models were also assembled. The production of Polonez was maintained, the model was modernized and new body styles were added. Nevertheless, waning demand led FSO to cease Polonez production in 2002.
Meanwhile, General Motors decided to build their own factory in Poland, in Gliwice, where the production of Opel Astra was relocated in 1998. GM's assembly line at FSO was then used for a short time to assemble Opel Vectra for the local market and then shut down completely, ending the relationship with General Motors (for the time being).
Post-Daewoo FSO
Daewoo went bankrupt in 2000, leading to an acute deterioration of FSO's position. Daewoo Motors itself was bought out by General Motors (and its Asian partners), but overseas manufacturing subsidiaries such as Daewoo-FSO were not part of the deal. Therefore, FSO became de facto independent again.
Through lengthy negotiations, the Polish government secured FSO the rights to manufacture and sell the Lanos and the Matiz until 2007. Nevertheless, FSO did not have the means to update the models, so they quickly became less and less attractive, not to mention that Daewoo's collapse caused the buyers to become very wary of Daewoo cars. FSO found salvage in the Ukrainian market, where Matiz and Lanos, assembled by the local partner AvtoZAZ, became very popular. In 2004, Daewoo-FSO was renamed FSO again.
During that period, the Polish government was actively seeking a new strategic partner for FSO, but no major automaker expressed interest. Finally, FSO entered talks with the British MG Rover, but as talks progressed it became apparent that the British company, did not have the means to complete the deal, despite vague suggestions of the involvement of an (alternating) Chinese partner. MG Rover went into administration in 2005, putting an end to any hopes connected with it.
In view of that, the UkrAVTO holding, the current owner of ZAZ, became the only possible partner for FSO. The Ukrainian company became gradually a majority shareholder of FSO (84,31% of shares), while at the same time strengthening the cooperation between FSO and ZAZ. UkrAVTO suggested it will provide a new model for the FSO to manufacture after the Matiz and Lanos licenses expire. This might refer to the Sens, and updated (T150) version of the Lanos, currently assembled in Ukraine using parts supplied by FSO.
In the late 2005, the media started reporting that General Motors is believed to be in talks with both UkrAVTO and FSO itself concerning the assembly of GM Daewoo products for the European Union market (currently, all GM Daewoo products for EU markets are imported from South Korea, which makes them subject to EU customs duties). In the end of 2006, it was reported that FSO is preparing to start the production of the Chevrolet Aveo.
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