INDIA Daewoo chief unaware of closure plans
Daewoo Motors India Ltd. managing director and chief executive officer Kim Young-Chang responded to earlier reports that global consultant Arthur Anderson had recommended that the bankrupt South Korean parent company pull out of India and Poland.
"I do not have the Arthur Anderson report, but I disagree with it. I understand that report has been made on behalf of the creditors and I do not know what is the objective of the creditors," Kim told AFP.
He saw no reason to shut the Indian operations in which Daewoo Motor has so far invested 40 billion rupees ($US870 million dollars).
"Will any global automobile company love to miss the Indian market? I don't think so."
According to AFP, Kim said China and India were the only two large markets left relatively untapped in the world.
"The Indian automobile market size has doubled in the past five years. Many agencies and our own analysis indicate that in the next five years it will cross the one million mark (from the present 600,000).
"The Chinese market is also growing, but slower than the Indian market. Its growth is not as explosive."
Kim told AFP that all car companies in India were going through a difficult time which was expected to continue for the next two years.
"The total automobile production capacity in India is 1.2 million cars, but the capacity utilisation is 50 percent. Costs are rising, the rupee is depreciating and this is hitting all auto companies."
Kim said the next two or three years would be crucial, AFP reported.
"Everybody is losing money this fiscal. The question is can you survive the next two or three years. If this market reaches 75 percent capacity utilisation that will be the minimum level of comfort."
Daewoo Motors India Ltd., Kim said, had begun to restructure and cut costs last February to assist it through the difficult period.
"We were the first to begin this exercise in the Indian auto market."
Daewoo India cut 865 of its 2,880 employees and is also "hiving off" its engine and gearbox manufacturing unit into a separate, wholly-owned subsidiary company.
"Discussions are on with the unions for a staff cut this fiscal also. In addition to these measures we are also continuously bringing in the best products," Kim told AFP.
The press agency added that Daewoo plans to launch three new cars in India
by December. It added that Kim said Daewoo's sales in India for the fiscal year
ending March 2001 would be up by a quarter over the previous year.
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