LOS ANGELES - Daewoo Motor America is proceeding with its ambitious growth plan for the U.S. market on the assumption little will be changed by the sale of its Korean parent, which is on the auction block.
The U.S. sales arm sold 2,242 cars in 1998 - its first year here - and 31,000 in 1999. But it expects to post sales of 100,000 units this year and 300,000 in the future.
The difference: a new national approach to the U.S. marketplace. The company has scrapped its original plan of trying to sell cars through college-student representatives and factory stores, and without national advertising.
'Our distribution strategy here has become quite successful and is moving in the right direction,' said I.Y. Oh, Daewoo Motor Co. executive director of sales and marketing for North America and South America. 'We have good dealers, but we need to improve our service in the field.'
Daewoo has 370 independent franchised dealers in 40 states, up from 50 independent points last July. It also is selling off its remaining 41 factory stores in eight states to independent dealers. Daewoo is aiming for 500 dealers in all 50 states by the end of the year, said D.J. Lee, president of Daewoo Motor America.
To help its distribution push, Daewoo has launched an $80 million national marketing campaign that will place ads in traditional venues of prime time TV, MTV, major sporting events and USA Today.
But Daewoo advertising also will hit less conventional outlets, such as the in-flight video service on American Airlines. Daewoo also will be the car display promotion on Univision's popular 'Sabado Gigante' variety program for the Hispanic market.
The campaign, farmed out to job shops instead of one agency, also will continue to advertise heavily in Korean communities in Los Angeles, New York and Chicago. Its Internet site automatically will forward customer requests for information directly to the local dealer.
But Lee and his U.S. team understand the successful bidder for the Korean parent might have different ideas for them.
Possible bidders for Daewoo Motor Co. Ltd. - which was put into receivership last year with estimated debts of more than $8 billion to assets of $4 billion - include General Motors, Ford Motor Co. and DaimlerChrysler.
Lee said his biggest hope is whoever buys the parent also takes its Ssangyong subsidiary.
Should the two stay together, Daewoo can continue with its plans to import the Ssangyong Korando and Musso sport-utilities. Already, the two-door Jeep Wrangler-sized Korando is slated to arrive in America this fall, while the four-door Toyota 4Runner-sized Musso probably will arrive in mid-2001.
2 NEW VEHICLES
But even without the Ssangyong products, Daewoo is counting on increasing its U.S. product effort by two more vehicles in the next few years.
The Magnus sedan, about the same size as the Toyota Avalon, will arrive with a V-6 engine for the 2002 model year. Daewoo also is performing U.S. market tests for the 'U100' crossover minivan sport-utility released in South Korea earlier this year. Target date for America is the 2003 model year.
Daewoo's European design studio also is working on a sports car and pickup truck, Lee said.