General Motors India is in talks with the creditors of Daewoo Motors India to acquire the car assembly unit of the failed carmaker and has set a timeframe to clinch the deal.

"We have recently completed the due diligence process (to acquire the car assembly unit)...we are in touch with creditors. We have set a timeframe which we are not willing to share," General Motors India president and managing director Aditya Vij said.

The announcement of GMI to acquire the car assembly unit of DMIL in March 2004 had revived hope of re-launch of Daewoo's compact car 'Matiz' as 'Chevrolet Spark' by the GMI.

"We will utilise the assembly line for manufacturing a mini (compact) car, to be launched next year," GMI vice-president (corporate affairs) P Balendran had previously said.

"We do not want to delay the acquisition," Balendran said. "There are certain legal and government issues which are being sorted out," Vij said. General Motors has been manufacturing 'Chevloret Spark' in China.

The domestic automobile industry has been dogged by reports of the re-launch of 'Matiz' by the Indian arm of the world's biggest carmaker.

DMIL, one of the first foreign automakers to set shop in India and used to manufacture 'Matiz' along with 'Cielo' and 'Nexia' sedans at its Surajpur (Uttar Pradesh) plant.

GMI is negotiating the deal with the main creditors of DMIL - ICICI Bank, IDBI and Exim Bank. GMI's plans to buy the car assembly unit of DMIL, which has been lying idle since the last two years, will help the company double its sales.

GMI entered the volume spinning premium small car segment only last year.