Daewoo dealer growth slower than expected

Bremen. GM-Daewoo's dealer network expansion is taking longer than originally planned.

In March 2003 GM-Daewoo officials announced that by the end of the year the Korean brand would have 400 sales partners -- a target which the company will now not be able to reach.

"It is no longer realistic. However, we will have more than 300 partners," GM-Daewoo Germany boss Guenther Sommerlad told Automobilwoche.

He now hopes to reach the original target number of 400 locations by the end of 2004.

Since March the importer from South Korea managed to win over no more than four new dealers. GM-Daewoo Germany now has 286 dealerships and ten service garages.

Sommerlad said that the delay was caused by the lengthy negotiations over the new dealer contracts, specifically by the discussion regarding the new margins. Daewoo wants to introduce a basic margin of 10 percent. Even the Kalos small car currently has a margin of 12.5 percent; with other models it is between 15 and 18 percent.

GM-Daewoo's plan is to gradually reduce the basic margin. Sommerlad said that a sudden change of the margin would be fair to neither dealers nor customers. By August the new draft contract will be introduced. At the beginning of September the contract should be ready to sign.

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