Reports suggest GM will confirm the European re-branding of Daewoo at the Paris Motor Show.

GM looks like giving up on the Daewoo brand in Europe and replacing it with Chevrolet. This is a shrewd move as it gives GM a chance to revamp its model range at the same time, and growing demand for new models within the SUV and supermini segments could provide the opportunity the US group needs to boost its European sales.

Officially, GM has refused to confirm media reports that its Daewoo vehicles will be re-badged as Chevrolet in Europe from 2005. However, confirmation of the move is expected at the Paris Motor Show in September, and GM sources have reportedly said that Chevrolet is to be rolled out as a major global brand.

This latest development follows the reorganisation of the auto giant's struggling European division. The management of its three major European brands - Vauxhall, Opel and Saab - has been centralised in Zurich to enable GM to speed up decision making and react faster to changes in consumer trends.

GM acquired a 44.6% stake in Daewoo in 2002, after the Korean group went bankrupt. The agreement has allowed GM to penetrate the Asian market; however the Daewoo brand itself has not travelled well. GM has admitted that it expects poor sales figures from Daewoo in Europe this year, and it has already swapped the name in favour of Chevrolet in a number of other major markets including the US (unsurprisingly, given that Chevrolet is an established brand name in North America) and China.

The switch to the Chevrolet brand in Europe lays down the gauntlet to GM's European division coming so soon after GM invested a substantial amount in a brand rebuilding campaign to link Daewoo with the parent company. A major factor in Daewoo's struggling sales is its poor image among European drivers; this may well have influenced GM's thinking over the future of the brand.

The re-branding, if implemented, would almost certainly be seen as an admission that the European Daewoo operation cannot be rescued. Yet it seems a worthwhile step for GM: the launch of a Chevrolet range would give GM the opportunity to create a worldwide brand associated with exemplary vehicles, particularly in the key growth segments of superminis and SUVs.

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