DETROIT SHOW: Exports seen boosting GM-Daewoo worldwide sales one third in 2004 - report
South Korean carmaker GM Daewoo expects to grow its worldwide sales this year by about one-third to 800,000 vehicles, but all the growth will come from exports due to the weak Korean economy, company chief Nick Reilly told Reuters.
Citing Reilly, the report said GM Daewoo Auto & Technology, South Korea's third-largest carmaker, 45% owned by General Motors, saw its vehicle sales grow to about 600,000 units in 2003 from 400,000 in 2002, with exports leading the way.
"I would think we'd have a similar sort of growth this year to about 800,000. Again all export," he told Reuters in an interview at the Detroit motor show.
The news agency said sales by GM Daewoo, formed in 2001 from the bones of bankrupt Daewoo Motors, have grown quickly as General Motors and affiliate Suzuki have used GM Daewoo vehicles to plug holes in their model ranges with low-priced entries in markets around the world. Suzuki holds a 15% stake in GM Daewoo while Chinese carmaker [and GM China joint venture partner] Shanghai Automotive Industry and Daewoo creditors hold the remaining stake, Reuters added.
Reilly reportedly said he expected South Korean vehicle sales to rise from about 1.3 million last year, but remain weak: "I would be surprised if the overall market is much more than 1.4 million for the whole year, and that's still a fairly weak market for Korea."
But Reuters noted that the Korean economy is recovering from last year's recession, the first in five years, though car sales were further slowed by tighter consumer credit.
Reilly told Reuters that GM Daewoo plans to broaden its range with the addition of a large car later this year, and a sport utility vehicle in late 2005 that will be exported and sold in Europe and perhaps China.
The SUV will be the first for GM Daewoo and gets the maker into a segment of the market that has been growing quickly in Korea, the report added.
Reilly reportedly said that, while GM Daewoo waits for those vehicles to arrive, he expects the firm to hold its share of the Korean market steady at about 10%.
As in the United States, the weak Korean economy is pressuring carmakers to add more consumer incentives on vehicles, Reilly told Reuters.
"Korea is starting to see reasonably significant incentives, which are not a part of the Korean market historically," Reilly reportedly said.
According to Reuters, GM Daewoo had 630,000 people sign up for its own recent marketing programme - free use of a car for one year to 1,000 people, who can then purchase the car at a discount after the "test drive."