General Motors has set an ambitious five-year market share target of 3 percent for Daewoo in western Europe.
Daewoo will need to grow rapidly to achieve the goal. A 3 percent share in a typical western Europe new-car market of 15 million would be 450,000 units. In its peak year of 2000, Daewoo sold 201,534 units in Europe, a 1.36 percent share. It declined to 0.85 percent last year.
GM Daewoo Auto & Technology Europe will become a wholly owned subsidiary of GM Daewoo Auto and Technology Co. in South Korea - as soon as GM, Daewoo Motor and the Korea Development Bank finalize the deal that was signed on April 30.
Erhard 'Hardy' Spranger will run GM Daewoo Auto & Technology Europe, which is expected to begin operations by September.
Spranger, 60, is a GM veteran. Born in Austria, he joined the company 38 years ago in sales and marketing in Vienna, and has worked in Germany, the USA, Norway, Italy, Japan, Portugal and Spain. Since 1999, he has been CEO of Opel Turkey.
Since late May, Spranger has been traveling throughout Europe to meet various Daewoo national sale companies and private importers.
'The Daewoo name in the coming years is destined to become a strong brand in Europe and worldwide,' Spranger said in a statement. 'This is the goal GM, Daewoo, the national sale companies and we are working for.'
Details are emerging on GM's acquisition of the most valuable portions of the bankrupt South Korean automaker.
* GM Daewoo Auto & Technology Europe will take over Daewoo's fully owned subsidiaries in Austria, Benelux, France, Germany, Italy, Spain and Switzerland, plus the European parts operation in the Netherlands. GM will complete the reorganization of the UK sales subsidiary. A GM Europe spokesman declined to comment on whether the new company would be headquartered in Germany.
* Daewoo confirmed the Kalos supermini would arrive in Europe in September. The upper-medium Magnus is expected to replace the Leganza shortly after.
* Separately, GM Europe confirmed that central and eastern European Daewoo factories in Romania, Uzbekistan and Ukraine will continue to receive parts from South Korea for three years - and for two years in Poland. But the cars built there will not be exported to western Europe anymore. GM said these companies 'are entitled to continue to use the Daewoo brand if Daewoo Motor feels this to be appropriate.' The use of the Daewoo name will cease together with the end of parts supply.
* England's MG Rover this month entered 'exclusive discussions' with the Polish government about taking over the Daewoo FSO plant in Warsaw and Daewoo FSO's distribution in Poland. In a written statement, MG Rover said: 'The scope of discussions include the continued production of models currently manufactured at the Zeran plant in Warsaw [Daewoo Matiz, Nubira and Lanos and the Fiat-based Polonez] and the 'local' manufacturing of MG Rover vehicles and engines. This would give MG Rover representation in the region.'
* The previously unnamed GM affiliates that will own 24.9 percent of GM Daewoo Auto & Technology Co. for an investment of $149 million (158 million) are Suzuki of Japan and Liuzhou Wuling Automobile of China, according to sources familiar to the talks. GM, which is investing $251 million, will own 42.1 percent of the new company. Local creditors led by the Korean Development Bank, will own the other 33 percent.
Suzuki has already licensed Daewoo to produce the Tico, a small minivan based on a previous generation Suzuki Alto. Production in South Korea started in 1988.
Liuzhou Wuling Automobile has a joint venture with Shangai Automotive Industry to produce minicars. GM is reported to be investing $30 million for a 34 percent stake in the joint venture that will start producing mini vehicles with an engine under 1 liter. The description matches Daewoo's 796cc version of the Matiz.