SEOUL - Daewoo Motor Co. Ltd., bankrupt and limping along on creditor bank handouts, plans to sell 15,000 of its new '01 Lanos II compact cars - aiming to capture a full 20% of the domestic compact segment.
The sales target is ambitious in the current down market. The 2000 Lanos II being replaced had total domestic sales of 18,673 units in a much healthier market, when they were being built and serviced by a much healthier company.
This time, and for the first time in Korea, Daewoo is giving out "no money down, no guarantors needed" new-car loans. The financing scheme applies to all Daewoo cars sold domestically.
The high-risk program, slipped silently into place in February, only now is it being promoted hard in order to get Lanos sales rolling.
To qualify, the customer must be at least 20 years of age. The plan provides 3-year financing at 10.7%. By contrast, the regular financing plans for those who opt to place a large amount down is a 3-year interest rate of 12.8%.
To make the high-risk financing program available, Daewoo is allying with two other financial institutions, Housing and Commercial Bank (H&CB) and Samsung Fire & Casualty Co.
The customer applies for the loan through Daewoo. Daewoo sends it to H&CB, which provides the financing. Samsung Fire and Casualty insures the loan and will make good if the customer defaults.
The new Lanos II 2001 models have been restyled with new front and rear bumper treatments to provide a sportier look. Functional and interior upgrades include new variable inertia seat belts and MP3-capable compact disc players.
Models include a 4-door notchback, 5-door hatchback and several 3-door models. Prices run from 6.25 million won (US$4,768) for the basic 4-door notchback with 1.3L SOHC engine, to 8.15 million won (US$6,280) for the 3-door with the high performance 1.5 DOHC Perfect engine. O - Vince Courtenay