PARIS -- Rebadging Daewoo-built vehicles as Chevrolets in western Europe will cost General Motors Europe tens of millions of dollars while it struggles to reverse losses.
The immediate costs for the Jan. 1 changeover are:
Discounts to sell leftover Daewoos are said to be as high as $1,862, or $47 million for all of them.
GM Europe CEO Fritz Henderson said last month that he would be happy if his company's operating losses this year were no worse than $100 million.
South Korean automaker GM Daewoo Auto & Technology Co., which is controlled by GM, will build the rebadged Chevrolets.
The move gives GM a low-cost brand for Europe.
GM Europe President Carl-Peter Forster says that while the main Opel brand's market share is stationary at about 10 percent, GM Europe "may see its European market share grow with the help of Chevrolet to 11 or 12 percent within five years."
GM has rebadged some Daewoo models as Chevrolets outside western Europe.
Says GM CEO Rick Wagoner: "We already had a strong start in central and eastern Europe earlier this year. We will now expand in western Europe with products from South Korea."
Henderson says Daewoo has increased its European market share to 0.9 percent from 0.6 percent since last year, "even without a diesel." Globally, GM sold 3.6 million Chevrolet-brand vehicles in 70 countries last year, although most were larger cars and light trucks built in the United States for the United States.
In Europe, the Chevrolet brand will be positioned as an entry-level car, below mainstream Opel (Vauxhall in the United Kingdom). But Chevrolet and Opel will overlap a bit.
Distributor sources say the number of unsold Daewoos in western Europe is 20,000 to 25,000.
Dealer sources say that they will offer incentives of around 15 percent of the price.
Says one source: "We must get rid of them because we do not want to overlap Daewoo and Chevrolet-branded cars in our showrooms."