The Korean unit of General Motors on Thursday finally detailed a long-open ‘secret’ on Thursday – its plans to remove ‘Daewoo’ from its company name and new models sold in its home market as it seeks to improve image and boost sales.
GM Daewoo Auto and Technology will change its name to GM Korea Company and replace the GM Daewoo brand with Chevrolet, as long used on almost all of its export units.
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GM Daewoo president, who revealed much about the plan apart from timing when just-auto spoke with him in Seoul last October, told the Korea Herald: “The actions we are about to take will take the company to a stronger, sustainable future. This next step is a revolution that recognises the company’s rich heritage and GM’s commitment to Korea.”
The decision was approved by the company’s board of directors earlier today (20 January, and the carmaker plans to complete all necessary procedures by the end of the first quarter, erasing the Daewoo name from the country’s passenger car market for good after 29 years.
The Daewoo brand will however be maintained in some eastern European markets where the marque has significant market share (and current or recent local assembly) until the present model lines reach the end of their product cycles.
“Changing our corporate name will improve our standing in GM’s global operations. The goal is to raise domestic sales and market share, to raise additional revenues, to expand our presence here in Korea,” Arcamone added.
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By GlobalData“[The change] will help us transform our company into a newer, better competitor in the domestic market.”
Since its launch in 2002, GM Daewoo has focused heavily on exports, primarily under the Chevrolet brand, and Holden for Australia, while its domestic sales have suffered.
Including complete knockdown (CKD) kits for assembly overseas, about 93% of GM Daewoo’s sales last year was accounted for by exports.
As part of the efforts to raise domestic sales, the company announced early last year that Chevrolet vehicles including the Camaro will be launched on the local market raising speculations that the carmaker was planning to replace the Daewoo name altogether, the Korea Herald noted.
Under the plan, the company will launch eight new vehicles, six of which will be produced locally, all of which will be marketed as Chevrolets. The company also plans to re-brand existing vehicles as Chevrolet, with the exception of the light commercial vehicles Labo and Damas, and the upper-midsized Alpheon (a locally assembled luxury sedan variant of the Buick LaCrosse).
At a Thursday press conference, Arcamone and other executives repeatedly emphasized the brand recognition Chevrolet has in Korea, and GM Daewoo’s already-significant contribution to the brand’s global sales.
Arcamone had previously told just-auto Korean Daewoo owners often rebadged their cars as Chevrolet, easily obtaining the ‘bow tie’ nameplates from dealers.
Today, he told the Herald about half of GM Daewoo customers paid extra to replace the GM Daewoo badge with Chevrolet, showing their “overwhelming” desire for the brand.
According to the company, studies have shown that 80% of GM Daewoo owners and 65% of prospective customers are familiar with the Chevrolet brand and a significant number responded positively to the transition.
“One quarter of Chevrolets sold across the world come from the Korean operations, we are GM’s largest producer of Chevrolet vehicles. The re-branding unifies under one strong global identity. It is the best decision for the company, shareholders, dealers and indeed the people of Korea,” Arcamone said.
Saying that he did not himself [want] to be the “closer” of the Daewoo brand, Arcamone said that Daewoo’s heritage formed the basis for GM Daewoo becoming GM’s base for mini and small vehicles, and that the introduction of the Chevrolet brand will bring benefits for the company, consumers and the Korean economy.
“Of the eight new launches, six will be produced in Korea, maintaining job security and creating new jobs,” Arcamone said.
“The company’s investment has averaged at about KRW1.3 trillion (US$1.2bn) per year in products and facilities. The capital investment for these new products, more than KRW6 trillion, will be made over the next two to three years.”
“All our facilities in Korea have been building Chevrolets, and more than 92% (of the company’s exports) of the output is Chevrolets,” Arcamone said, adding that Korea remains the only market in the world without the brand.
Arcamone added that the company’s union is fully behind the decision.
“I have been with the company since Daewoo, and had confidence in the brand. But when the company became GM Daewoo, I had doubts about the necessity of keeping the Daewoo name,” vice president for engineering Sohn Dong-youn told the Korea Herald, backing up Arcamone’s statement.
“Now, about 60% of the employees are new (since GM’s takeover) and since the image that Daewoo is a broken company remains strong, [the] majority agreed with the change.”
Regarding the efficiency of the company’s sales network, and projections for sales this year, vice president for sales Ankush Arora told the paper the dealer network is performing well and that the new launches as well as existing models will be sufficient to maintain the momentum gained last year.
Last year, GM Daewoo’s sales jumped by about 20% compared to 2009.
“If you look at our sales over the last three, four months, we have been averaging 13,000 units, on the back of the Lacetti Premiere, Matiz Creative and the Alpheon,” An said.
“We should be able to maintain rate at similar levels with the three cars. The new launches, they may be completing in segments that aren’t big, but the unique nature of some of our vehicles will be able to draw customers from other segments.”
