A bargain, maybe - but where does it fit?

What may look like a great opportunity when seen from Detroit - General Motors' takeover of troubled Daewoo Motor Co. - is just another problem when viewed from Europe.

Yes, GM is increasing its presence in Asia at a bargain price. It also becomes a major player in South Korea, the second-largest market in the region, with sales of almost 1.5 million cars and trucks last year.

But for General Motors Europe, Daewoo gets dumped into an already messy agenda.

GM Europe President Michael Burns and his team are busy enough as it is. They are overseeing Carl-Peter Forster's effort to turn around money-losing Adam Opel AG and Peter Augustsson's attempt to revive Saab in terms of image, product and volume.

In addition, GM Europe must manage the powertrain and purchasing joint ventures with Fiat Auto S.p.A., plus the premium architecture for future Alfas, Lancias and Saabs.

What could Daewoo's role be within GM Europe?

The easy answer is an entry-level brand positioned under Opel. But, in fact, Daewoo's models compete directly with those of Opel, even in price.

Only in the supermini segment is there no direct competition. But the Corsa doesn't have a Daewoo rival only because the South Korean carmaker ran out of cash before starting production of the Kalos, which was unveiled a year ago at the Paris auto show.

Daewoo's books show how much money the company was losing by offering cutthroat prices in Europe. So there clearly is no way to make Daewoo cars cheaper.

To make room for the brand within GM Europe's portfolio, Opel and Vauxhall would have to be moved upscale. Is the market ready for that?

Luca Ciferri is an Automotive News Europe reporter in Turin, Italy. You can e-mail him at

You can reach Luca Ciferri at lciferri@crain.com

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