Daewoo Motor India Ltd (DMIL) has postponed plans to launch three new luxury cars
in India this year, the Business Standard newspaper said.
DMIL announced in March that it would import and sell three new cars in 2001
– the Magnus (Leganza), Nubira II and Lanos II.
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But, the newspaper said, DMIL’s newly appointed managing director and
CEO, Young-Tae Cho, now says that import duties are still very high and it may
not be the right time to launch.
“The cost of the imported cars will be too high if we go through the [completely
built up] route,” Cho told the Business Standard.
“We are now studying the market to identify the segment in which to launch
our new car. We will have firmed up our plans in the next couple of months.”
While Daewoo was expecting a reduction in import duties when its previous Indian
managing director announced plans for the new cars last March, the Indian government
instead increased duties on CBU models to 120%.
Profit margins on these cars are slim and the Daewoo management won’t
risk launching them without the promise of decent sales volumes, the Business
Standard said.
The newspaper added that sales of DMIL’s volume seller, the 800 cc Matiz city
runabout, have declined over the past few months, mostly due to consumer apathy
stemming from the ailing financial health of the South Korean parent company.
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