South Korean car maker GM Daewoo Automotive & Technology Co expects new vehicles and expansion into overseas markets will double its global sales and its share of the Korean market over the next three years, president Nick Reilly said at the weekend, according to Reuters.
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GM Daewoo, formed a year ago by General Motors and several partners from the ashes of Daewoo Motors, will broaden its product range with a sport utility vehicle and a large car, competing in segments of the market where it currently has no entry, Reilly, previously Vauxhall’s managing director, reportedly said.
“We don’t have a SUV, we don’t have a large car. We will have those products,” Reilly told North American journalists on Saturday in Seoul, according to Reuters.
The news agency said SUVs and large cars are two of the fastest growing segments of the Korean vehicle market, and currently account for about a 30% share of industry sales. GM Daewoo expects South Korean car and truck sales will total about 1.5 million vehicles this year, down from 1.6 million last year, the report added.
GM Daewoo production is expected to grow from about 400,000 vehicles this year to nearly full capacity of about 900,000 vehicles within three years, Reilly told Reuters.
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By GlobalDataAdditionally, GM Daewoo will this year export about 200,000 completely knocked down (CKD) kits to other countries for final assembly. Such exports will grow to more than 300,000 next year, and more so in the future, Reilly reportedly added.
In a separate report, Reuters said GM Daewoo already ships its mid-size car, the Lacetti, to China, for assembly and sale as the Buick Excelle and, later this year, the Matiz will be shipped in CKD form to China as the Chevrolet Spark, part of General Motors’ strategy to expand the Chevrolet line-up there.
“We would expect at least another two cars of GM Daewoo to go into China, either under the Buick or Chevrolet brand,” Reilly reportedly told the North American journalists, adding: “They have the people, the resources, to have a huge, huge market.”
Reuters noted that assembly of CKD kits in China skirts some taxes there while taking advantage of GM Daewoo’s engineering skills and under-utilitised production facilities.
Reilly told Reuters that GM Daewoo could double its share of the Korean market to around 20% from about 9% last year. So far this year, the company has raised its South Korean market share to about 11%, taking share from No. 2 brand Kia, he reportedly added.
According to Reuters, Reily claimed that, over the next three years as GM Daewoo adds new vehicles and strengthens its brand image, it could pass Kia to be second to Hyundai in South Korean sales while stronger sales will bring GM Daewoo closer to its goal of returning to profitability.
“In a couple of years, when we get up to the heavy utilisation of our capacity, and we get past the heavy spending, we ought to be getting close to it,” he reportedly said.
Reilly told Reuters GM Daewoo will invest about $US1 billion next year, up from about $500 million this year, into its operations, most toward the development of new vehicles and diesel engines.
Reuters noted that GM Daewoo currently doesn’t have a diesel engine, but new regulations in Korea will allow car makers to add diesel engines to cars – diesel fuel is currently about half the price of petrol.
