End of the road for Daewoo

DAEWOO Auto – the oft-troubled South Korean motor company that has been rescued more times than Bondi swimmers – will be laid to rest.

Owner General Motors will consign the name to history at the end of March, renaming the subsidiary GM Korea Co, with all of the company’s mainstream cars branded Chevrolet for the local South Korean market from now on.

The move – designed to shake off years of baggage in the domestic South Korean market – was announced today by GM Daewoo president and CEO Mike Arcamone who said the change was consistent with GM’s naming system in other markets.

“This important new brand strategy is designed to strengthen our commitment to the Korean market, recognising it as one of the strongest performing countries within GM’s global operations,” he said.

“We are well positioned to bring one of the world’s iconic brands to Korea. We cannot afford to sit still, and instead, choose to make a bold move with the launch of Chevrolet in Korea.” Mr Arcamone said the company’s market research overwhelmingly pointed to consumer acceptance of the Chevrolet brand in Korea.

“This new growth opportunity will allow us to compete in brand new segments and offer our customers more choices than ever before, resulting in a strong future for our company, our employees and our sales agents,” he said.

Left: GM Daewoo president and CEO Mike Arcamone.

The re-branding exercise will include new Chevrolet livery for Daewoo dealerships across South Korea as the new company rolls out eight new Chevrolet-badged models this year, including the Holden-designed Camaro.

Daewoo Auto and Technology had its roots in a company called Shinjin Motor that rebuilt military vehicles for sale after the Korean War of the 1950s.

The Daewoo Group – a multifaceted industrial conglomerate – bought the motor company in 1982, changing the name to Daewoo Motor.

It went on a rapid and often reckless global expansion through the 1980s and 1990s until the Asian financial crisis of the late 1990s brought it unstuck.

GM and partners SAIC (Shanghai Automotive Industrial Company) and Suzuki rescued the bankrupt company in 2001, renaming it GM Daewoo. GM Holden holds the GM stake in Daewoo on behalf of GM, whose share has now risen to 70.1 per cent.

Around the same time, the Daewoo name disappeared from export markets – including Australia, in 2004 – where a legacy of shoddy cars built on hand-me-down platforms from the likes of Opel made the brand all but worthless.

While Daewoo products were re-born as Chevrolets in many export markets, GM Holden took over imports of the ‘GM DAT’ products for Australia with ex-Daewoo cars such as the Barina.

It has since added the Captiva, Cruze and Barina Spark, all of which are based on new-generation GM platforms. All have been a great success for the Australian company.

However, GM DAT continued selling Daewoo-branded products in South Korea, with some success against the might of arch rival Hyundai Motor and its subsidiary Kia.

Mr Arcamone said GM Daewoo’s domestic sales increased 20 per cent last year, with the market share increasing to double-digits. He said exports had soared 35 per cent, mainly on the global success of the Cruze and Captiva.

However, GM clearly thinks it can do better under the Chevrolet bow tie, as the Daewoo name has been tainted by bankruptcy and the subsequent jailing of Daewoo founder Kim Woo-choong for embezzlement and fraud.

While GM uses the Korean operation as a cheap source of four-cylinder products, it has been ramping up the engineering and design capability of the branch in recent years. Several Holden designers and engineers have seen service in GM-DAT’s technical centre.

Daewoo also has been a major export market for Holden-made engines.