The main parts supplier to South Korea's Daewoo Motor has ended a boycott that saw production at the firm's plants halted for two weeks.

Korea Delphi Automotive Systems, which provides the car maker with about one-fifth of its components, ceased deliveries at the end of August in protest at non-payment.

But while the boycott was due to continue until at least Wednesday, Korea Delphi was believed to have suffered more than its client, since it relies on Daewoo for more than two-thirds of its local business.

"Financially weak Korea Delphi could not fight properly with its creditors for long," said Song Sang-hoon, analyst at Dongwon Economic Research Institute.

The firm - a joint venture between US components giant Delphi and some former Daewoo units - posted a net loss of 69.2bn won (�37m; $58m) last year, mainly as a result of serious disruption at Daewoo.

Little to lose

Daewoo Motor, which declared itself insolvent at the end of 2000, has lost some 15m won per day in production as a result of the stoppages.

But the firm has less to lose than Delphi, since it is waiting for a relaunch and cash injection under a joint venture with General Motors (GM), the world's biggest car maker.

The GM deal was finally signed in April, after bitter protests from Daewoo unions, and could become reality as early as this month.

GM has already said that the parts boycott should not imperil, or even postpone, the venture.

Pain spreads

In the meantime, however, Daewoo's financial weakness is rippling throughout the Korean car industry.

Korea Delphi looks like being the main sufferer: its president, Bae Gil-hoon, submitted his resignation on Friday, and the firm was pressured by its creditors into conceding defeat.

Some 190 other suppliers are also owed about $700m (�449m) by Daewoo and its banks, and are demanding to be paid before the GM venture is launched.

Suffering the same financial fears as Delphi, however, they agreed to halt any boycotts last Wednesday, a concession which undermined Delphi's stance.

As part of the agreement with Korea Delphi, Daewoo has now reportedly agreed to pay a bill in cash within two weeks of the delivery of first parts.