Yesterday's announcement of a takeover deal between General Motors, Daewoo Motor and Daewoo's creditors does not signal the end of the present Daewoo Motor Sales operation in the United Kingdom, an official said today.

"GM is clearly planning to maintain the Daewoo brand in Europe and Daewoo Cars Ltd management will now commence working with a GM taskforce to create a new UK sales operation," said DCL PR manager Neil Reeve.

DCL is expecting GM to set up offices at its Rickmansworth headquarters, north-west of London, in the next few weeks, Reeve said.

He added that DCL's direct sales operation "doesn't fit in" with GM's way of doing business and said that company executives would work with DCL to set up "a brand-new sales company".

"They will shape it the way they want it," Reeve said.

Unlike other distribution operations across Europe, Daewoo launched in the UK in the early 1990s with a unique direct sales operation, setting up a number of distributor-owned sales centres with discreet 'no hassle' salespeople and non-negotiable 'no-haggle' fixed prices.

Customers trading in used cars were offered a fixed trade guide book value and servicing was carried out by the nationwide Halfords chain which also maintained a fleet of demonstration models that could be loaned to customers while their cars were in for maintenance.

The company attracted considerable resentment from the established motor trade with some franchises refusing to take the Korean models as trade-ins.

As its market share grew and used car stocks built up, DCL carefully controlled the supply to retail the cars through its own outlets. Later it also set up a small chain of independent dealers to specialise in used Daewoo models.

About a year ago, the company announced a change of direction. It ended the servicing deal with Halfords and said it would establish a franchised dealer network to sell and service the cars alongside its own outlets.

Reeve said that GM executives first visted the DCL operation two years ago.

"They made clear that direct selling was not how they did business and told us: '[dealer] franchising is our policy'," Reeve said. "It was clear we had to adopt that to be attractive to GM."

Reeve said that DCL began recruiting franchise dealers a year ago and now has eight operating 12 retail outlets in addition to the company's own Daewoo Centres.

"The majority of sites are still our own," Reeve added, "so we're sat on the fence at the moment with a foot in both camps."

"GM remains committed to the Daewoo brand throughout Europe and the UK and customers can be fully reassured of a continuation of sales and service provision," he said.