Who will buy Daewoo?

Business in U.S. isn't half bad despite woes back home Unfortunately for Daewoo North America, all of the recent publicity about its Korean parent company has been negative.

Despite all the talk and speculation about who may some day buy Daewoo, Gary Connelly, senior vice president of Daewoo's North American sales & operations, remains optimistic - or at least stoic.

"It's business as usual," he says.

Dealers are echoing that sentiment. So far, the financial problems of the parent company have not devastated sales in the United States. Not that sales are up. In fact, they've dipped.

Mr. Connelly says, "The little downturn we are experiencing is mostly seasonal and is being felt by the entire industry."Despite their optimism, Daewoo will finish 2000 about 10,000 units short of their projected 100,000 sales. Mr. Connelly still is predicting an increase for 2001. He forecasts North American sales of 130,000 units.

They might reach that if they strengthen their product line in 2001. That could happen if GM or some other major automotive company purchases the Korean company. Daewoo has four new vehicles they are itching to bring into the U.S. but all plans are on hold for the time being.

The vehicle that dealers want right now is the Korando, a mid-size sport utility vehicle. Daewoo also has a mini-SUV planned - the U-100. Sport versions of the Lanos and the Nubira cars are also in the works, along with a new and somewhat larger Leganza sedan. Daewoo will also show concept cars at both the Los Angeles and Detroit Auto Shows.

Current problems aside, Daewoo has grown extraordinarily since entering the U.S. market in 1998. Starting with only 15 dealers, they now have over 500. That's after an unsuccessful experiment in which college students, rather than dealers, tried to sell Daewoos.

Mr. Connelly believes the dealer network is strong in part due to Daewoo requiring its dealers maintain an exclusive showroom with a dedicated sales manager and sales personnel.

"Because our dealers have invested serious money to sell the Daewoo product, they're working hard to make sure the franchise succeeds," says Mr. Connelly.

He admits they a little behind because they switched from having company stores to maintaining franchises. Because of the switch, the company will have regional marketing and a Dealer Council in place by early 2001.

Daewoo is just starting to advertise, finishing a recent network campaign. They are advertising heavily on billboards and on cable.

Even with a slowing economy, Daewoo North America believes it is positioned to take advantage because of their bargain pricing.

However, Mr. Connelly believes across the industry, "everybody will have to be smarter and tighten their belts. We will probably see more incentives and rebates in 2001. Next year will still be a good on for the industry, only more challenging."