SEOUL - Adding still another twist to its U.S. launch plans, Daewoo Motor Co. now says it will market its three-vehicle lineup almost exclusively to college students.
The sales effort, which is now scheduled to begin this fall, will be backed by almost no advertising, Daewoo Chairman Kim Woo-Choong said in an interview here. The company instead will rely on word-of-mouth marketing, convert-a-friend sales tactics and free evaluation drives up to six months long.
Kim has said all along that college students would be one of the automaker's target audiences in the United States, but the March 28 interview marked the first time he has identified them as Daewoo's principal market.
'We cannot compete with other manufacturers who are selling big units, with bigger advertising and promotion budgets. It is better to go for some special segment,' Kim said.
Kim noted that 4 million students graduate from college every year, which he said makes for an impressive market.
Before sales are launched, however, an initial run of 5,000 test vehicles arriving in late May will be tested to be sure they measure up to U.S. quality standards. If they don't, Daewoo will put yet another delay on its entry into the U.S. market, Kim said.
'We are worried about getting the same reputation in the U.S. as the other Korean automakers, so we need to have a different approach,' he said.
Kim suggested that Daewoo may be looking to the United States more for a worldwide marketing hook than for any actual sales success.
Daewoo's goal of selling 100,000 to 150,000 cars in America is a small percentage of its global goal of selling 2.5 million vehicles annually by 2000.
'If we are successful in the United States, by consumer awareness, technology or quality, we will have no problems with any other countries,' Kim said.
Said Kim Tae-Gou, president of Daewoo's automotive group: 'If we get success in the U.S., that will be a passport to every other country and helps our marketing and image. The United States is the toughest market in the world, so we want to be successful. We want that challenge.'
THINKING IT THROUGH
Still, Daewoo's approach, as described by Kim and other executives, seems riddled with potential problems:
Although college students are the identified market, Daewoo forecasts that the $20,000 range-topping Leganza will be its top-selling vehicle in the United States, accounting for half its volume. In contrast, executives figure the Lanos, an Escort-sized subcompact that will be priced under $10,000, will account for only one-fifth of sales.
Daewoo's main marketing focus relies on the Internet. But a small sampling of college journalists showed skittishness about the Net as a commercial venture, deriding targeted junk e-mail as 'spam' that needs to be eliminated.
Daewoo says it will provide free maintenance with every car. But apart from the few factory stores it plans to put up around the country, owners will have to rely on contracted service from Pep Boys stores or some other third-party provider.
Daewoo said it will provide insurance for students during the experimental test drives. When asked about insuring such a high-risk situation, one insurance executive said, 'Not a chance. Then again, you can insure anything - for a price.'
Chairman Kim said Daewoo will finance purchasers, perhaps even forgiving the first year's payments until a student graduates. When asked if his company would cover such a long-term, high-risk transaction, a finance company executive said his company would not. He said he did not know of any finance firm that would. Kim said Daewoo is in negotiations with receptive finance and insurance companies willing to take such risks.
And what if a student has no desire to own a Daewoo, but sees a chance to snag free wheels to move a buddy into an apartment or take a wild spring break romp to Florida?
'Of course, we might select bad drivers. But we want to give them a chance to drive,' said M.H. Kim, president of Daewoo Motor America Inc.
'Initially, some may misuse the cars for a vacation, but that, too, is a test.'