General Motors will continue to service Daewoo cars at affordable prices, contrary to recent Hungarian press reports, The Budapest Sun reported, citing Ágnes Róna, head of public relations at GM Daewoo Central and Eastern Europe Autóforgalmazó Kft (Daewoo CEEU).

Daewoo CEEU was set up by GM on November 1 this year as a new entity to control Daewoo’s assets in the region.

Daewoo Motor Hungary Rt is the local subsidiary of the now defunct South Korean automobile manufacturer Daewoo Motor Co.

In April this year GM paid $US1.2 billion and acquired the Daewoo motor company worldwide.

Róna was responding to the claims of about 30 local franchise dealers who have publicly told the nation’s Daewoo owners to expect the worst after GM announced it had selected only a handful of franchises to replace what was once a 51-member network representing Daewoo Motor Hungary Rt.

The angry dealers said they had invested several millions of forints into their dealerships, but were now facing losing that money since Daewoo Motor Co went under last spring.

“The new company, GM Daewoo Central and Eastern Europe Autóforgalmazó Kft, set up on November 1 this year, has integrated only 17 franchise dealers to continue with retail sales in Hungary,” said Róna.

“This being so, the new company is legally not liable for any cooperations, agreements, or obligations that the franchise dealers had with its predecessor.”

The Budapest Sun said former Daewoo dealers published an announcement in the form of an advertisement in Hungary’s biggest national daily newspaper, Népszabadság, claiming they had been “taken advantage of” and that all Daewoo owners could expect to receive shocking service, spare parts at sky-high prices and very little support as the new company had “no qualified mechanics” for the Daewoo vehicles.

One of the dealerships that fell victim to the changes is Daewoo Sztráda Kft, located on Szentendrei út in Budapest’s District III, whose owner was forced to stop selling new Daewoo cars on October 28 and now only carries out service work for owners.

“I advise all car owners to go to one of the still-functioning units run by GM,” said the owner, who declined to give his name.

Róna explained that when GM took over the Daewoo subsidiaries in Hungary it was not obligated to retain the franchise partners under contract with the local defunct subsidiary.

“GM set up a whole new entity in Hungary to represent Daewoo as its regional office,” she said. She added that all Daewoo owners were still entitled to the three-year warranty on their vehicles.

“The new entity is running with about 30 employees and plans to increase the workforce in due course,” she said. “Currently there are 55,000 Daewoo vehicles on Hungarian roads and not one of them will be without service.”