General Motors will sell cars built by its Korean Daewoo unit through Suzuki dealerships in the United States, dealer sources told the Detroit Free Press.
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The sources told the newspaper that sales should begin this year with two Daewoo-built cars rebadged as Suzukis. Suzuki is expected to formally announce the plan with the introduction of a midsize sedan and a subcompact car at the Chicago Auto Show on February 12, the report added.
“The midsize will be the size of a Honda Accord, but it will cost less and come with Suzuki’s seven-year, 100,000-mile warranty,” a Suzuki dealer who asked not to be identified told the Detroit Free Press.
The report said the plan would give cash-strapped Daewoo a source of income and broaden Suzuki’s model line.
“It’s the only thing that makes sense,” another Detroit-area Suzuki dealer who requested anonymity told the newspaper. “There are a million reasons this will work.”
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By GlobalDataSuzuki and Daewoo already plan to combine some vehicle development and part purchasing, which should make the new cars easy to service, another dealer told the Detroit Free Press.
According to the report, Suzuki dealers also said they also expect to add a larger sport-utility vehicle and a more powerful version of the Aerio (Liana) subcompact car to their lineups over the next couple of years.
The Detroit Free Press said that debt-laden Daewoo stopped selling cars through its own dealers in the United States in 2002. It had offered a line of three small cars priced from about $9,600 to nearly $20,000. Suzuki sells a line of small sport-utility vehicles and subcompact cars priced from about $13,500 to just under $25,000.
The report said GM had considered selling the Korean cars at Chevrolet dealers and added that neither GM or Suzuki would comment on the development.
“GM is looking for cost efficiencies in their distribution network,” Comerica senior economist David Littmann told the Detroit Free Press. “Suzuki has a better sales network and better name recognition than Daewoo.”
