LOS ANGELES - Barely three months into its U.S. rollout, Daewoo Motor America is piling up inventory at its ports and not making a dent in its attempts to market to college students - the core of its U.S. sales strategy.
From the time it opened 15 factory-owned stores in nine states in mid-September until the end of November, according to unofficial sales tallies obtained by Automotive News, Daewoo has sold just 1,750 cars.
But even that number overstates sales - only about 700 units have been retailed to the general public, and just 20 have been sold to college students.
The remaining 1,000 units were heavily discounted vehicles sold to 'Daewoo Campus Advisers' or 'Daewoo Korean Advisers,' Daewoo employees who do grass-roots sales work in the community or on the college campus near the dealership, according to a Daewoo executive who insisted on anonymity.
Piling up behind these slow sales is an inventory of 10,000 unsold cars. That stockpile seems likely to swell to as many as 30,000 units in January after the arrival of new shipments in December, the Daewoo source said.
About 2,000 of that number are in Daewoo's long-term test-drive fleet, vehicles that are in the public's hands but still owned by Daewoo.
Daewoo had planned to sell 100,000 cars annually in the U.S. market within a year of the launch. The company offers three lines of four-door and five-door compact cars - the Lanos, Nubira and Leganza - sized similarly to the Honda Civic, Ford Contour and Toyota Camry, ranging in price from $8,999 to $18,910.
Daewoo executives declined to disclose sales or to comment on the unofficial numbers, but one did speak about the ongoing operations.
Bill Tucker, Daewoo Motor America vice president of marketing and customer relations, said he is 'reasonably pleased' with the progress Daewoo has made. Daewoo will open about 50 independent franchised dealerships during 1999, in six states that do not allow factory-owned stores, he said.
'We have a good number of vehicles on the street. Through our Daewoo Campus Advisers program, we are getting cars into the campus community and getting people familiar with our product through grass-roots marketing,' Tucker said.
In addition to college students, community leaders and clergy have been given Daewoo vehicles for free six-month test drives.
Tucker called the large number of discounted vehicles sold to Daewoo's sales force 'an investment, not something we anticipate continuing forever. Nobody can afford to sell a car for half price, but we're making an investment in the market through our marketing network.' Regarding the high inventory, Tucker said the company wanted to be sure it had a full pipeline of all models, colors and option packages during launch.
But like any startup, Daewoo has some problems, he admitted. Recently, Daewoo had Southfield, Mich.-based consultancy A.T. Kearney take over the college marketing program.
'We need to work on our internal processes and procedures, our communication and coordination. Some of the internal links haven't been in place, so that everyone knows what everyone else is doing,' Tucker said.
He also wants Daewoo's marketing to be more focused.
'I knew growth was going to be slow, but it has been difficult cutting through the clutter of the other manufacturers and getting our word out,' Tucker said.
On a per-store basis, Daewoo is not doing all that poorly, averaging about 30 sales a month at each factory-owned store. That includes sales to their own employees, however. Dealership representatives say more sales to the general public will appear when the grass-roots marketing campaign takes hold.
'We've made great strides in ... educating people about the product,' said Brian Wetzel, marketing specialist at Daewoo's Arlington Heights, Ill., factory store.
Added Greg Campbell, sales manager at Daewoo's Huntington Beach, Calif., factory store: 'A lot of customers like the free three-day test drive. It really lets them feel what the car is like. But the big selling point has been the free maintenance. They can't believe they get that with a car at this price.'