Daewoo will soon be called Chevrolet in Europe

Zurich. General Motors will market all its Daewoo models as Chevrolets in western Europe starting next year.

General Motors Europe (GME) will officially announce the change at the Paris auto show in September. The change in branding will coincide with the market launch of the Chevrolet Niva.

"We cannot confirm this but cannot deny it either," said GM Vice Chairman Robert Lutz.

The change is partly to reduce market confusion. In 11 countries including the Baltic countries, Croatia, Poland, Romania and Turkey, Daewoo models are already being sold as Chevrolets. But in 16 western and central European markets including Hungary, the Czech Republic and Slovakia, the Korean-built models are still branded as Daewoo.

A homogenization seems logical but is a bit complicated. All of GM Daewoo Europe belongs to GM Daewoo Auto & Technology in Korea, of which General Motors and GM affiliates have owned 44.6 percent since the company's founding in 2002.

But GM executives said that trouble with creditors is not to be expected.

In North America Daewoo models are already being sold with a Chevy logo.

Looking to save costs

Last year GM Daewoo Europe boosted sales more than a 20 percent. But GM, faced with enormous extra costs, is focused on profitability. The Chevrolet changeover - the dealers and country representatives must change names - should primarily save costs.

In the future, the Daewoo automobile brand will only exist in Asia.

High investments were made when the brand was first introduced in Europe in 1995. Insiders estimate that the German publicity campaign alone cost 50 million euros.

Daewoo's unit sales in Germany rose by 157 percent to 12,800 units in 2003. Daewoo brand awareness was at 70 percent.

Unit sales rose by another 72 percent (8,100 new registrations) during the first half of 2004.

Chevrolet's situation is different.

"The manufacturer has a bad image here," said Ferdinand Dudenhoeffer of the Center of Automotive Research in Gelsenkirchen. "GM lacks in feeling for brands and markets over here. Hyundai and Kia will be pleased about that."