GM Daewoo, the South Korea-based unit of General Motors, expects to return to profitability in 2010, company president and chief executive Mike Arcamone said.
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He told Reuters the automaker had returned to positive cash flow from September and was aiming to increase its market share in South Korea to a double digit percentage in 2010.
Last year, when GM Daewoo’s parent restructured in bankruptcy, the unit had a market share of roughly 8% of the South Korean market. Almost a year ago, GM, which has a 70%+ stake, asked Seoul for financial aid and was in talks with the state-run Korea Development Bank for much of last year.
KDB is GM Daewoo’s main creditor and second largest shareholder with a 17% stake.
Arcamone said GM’s injection of US$450m into the unit in October, aggressive cash conservation efforts over the past year and improving industry conditions had positioned the company for “strong liquidity”.
He added: “We’re self-sufficient. We are generating cash and don’t need a line of credit. We’re starting 2010 with a very, very strong cash position.”
GM Daewoo sells almost 90% of its production outside South Korea, branded mostly Chevrolet. The new Cruze small car, the Aveo compact and the Spark subcompact are among upcoming vehicles designed and engineered by the company.
Arcamone told Reuters: “If you look at what Chevrolet’s got to offer in terms of new products, they are all from GM Daewoo. We’re extremely important for the success of GM and more important for the success of Chevrolet.”
GM Daewoo is responsible for GM’s small car design and engineering and seen as crucial to the carmaker’s plans to sell more vehicles in emerging markets and meet tougher fuel economy standards in the US.
