Daewoo International, a trading unit of South Korea's steelmaking giant POSCO Co., will likely finalize a deal for its automotive business in Saudi Arabia early next year "at the latest," an industry source said Wednesday.
  

It also plans to start building an assembly line for vehicles in the Middle East country within the next year as all necessary preparations have been made, according to the source close to the matter.
  

"A deal for the automotive business in Saudi Arabia could be reached early next year at the latest," the source told the English division of Yonhap News Agency on condition of anonymity. "Detailed business plans, including investment, will be unveiled when the deal is announced."
  

Some media reports have said the deal could be completed by the end of November, but he said that won't happen.
  

"The contract would be finalized in December at the earliest, but the likelihood is that it will be further delayed until early next year," he said.
  

This upcoming deal is part of efforts by Daewoo International and POSCO to step up cooperation with the Public Investment Fund, Saudi Arabia's sovereign wealth fund, in the automobile sector.  
  

In June, POSCO sold a 38 percent stake in its construction unit POSCO E&C Co. to PIF for 1.24 trillion won ($1.07 billion).
  

Daewoo International is also planning to buy a 15 percent stake in a car company to be created by the Saudi fund for about 60 billion won. The deal will also be announced along with the auto business deal, sources said.
  

For the joint business, Daewoo International will be in charge of supplying auto parts, including engines, while POSCO plans to provide steel used in vehicles. POSCO E&C will lead the construction of the assembly line.
  

Though the deal is soon to be signed, fears of a legal dispute are still lingering over a possible use of "Daewoo" as a car brand in the Middle East, market watchers said.
  

GM Korea Co., the local unit of General Motors Co., obtained its right to use Daewoo as its own brand in 2001, when the now-defunct Daewoo Group carried out a workout that included the sale of its automotive unit to the U.S. carmaker.
  

Daewoo International claims that it still has the "ownership" of the brand and that there is no room for legal disputes if it uses the brand, pointing out the fact that GM Korea, has not actually used the brand for years since it was renamed from GM Daewoo.
 

"There is no legal issue here. We could choose another name for the car brand, but we will use Daewoo if we decide to use it. Any legal problems would keep us from using it going forward," a Daewoo International official said.
  

GM Korea remains adamant on its stance, saying that it will consider taking legal action should Daewoo International go ahead with its plan to use the brand, adding that it will "wait and see until that happens." (Yonhap)