By on April 29, 2010

If there were a global brand that GM should have killed, it’s probably Daewoo. Outside the South Korean market, the name is so associated with cheap, crummy cars, that GM rebadges nearly all of Daewoo’s exports as Chevrolets. And even then, the “Chevwoo” brand is tainted by the fact that GM refuses to take ownership of its troubled South Korean operations, and enforce a one-badge policy in line with Chevy’s global branding. And it’s not like the Daewoo name is all that beloved in Korea either, as The General recently figured out that as many as 40 percent of all Korean Daewoo buyers were replacing their badges with Chevy bowties supplied by the aftermarket. In fact, GM was threatening to get rid of the Daewoo name altogether and replacing it with Chevrolet. But apparently because of fears of alienating Korean customers and “resistance from labor unions,” GM has decided to introduce the Chevrolet brand to Korea without killing off Daewoo. As GM’s presser puts it:

today’s announcement is about brand coexistence, not brand replacement

Sound familiar?

According to a WSJ [sub] interview with GM-Daewoo CEO Mike Arcamone,

GM Daewoo will have a multiple brand strategy composed of the existing GM Daewoo brand, the Chevrolet brand and the “unique” brand which includes the Veritas and the Alpheon sedans

So instead of replacing a weak, local brand with a stronger global one, GM is pushing both, plus two single-model “unique brands.” Because why have one brand when you can have four?

Meanwhile, the only Chevy vehicles actually approved for the Korean market so far is the Camaro, which will reportedly go on sale there next year in “2.0 liter and 3.6 liter versions.” Oh, and GM-Daewoo won’t be paying the mothership for the license to the Chevy name either, according to the WSJ [sub]. But even GM can’t squeeze blood from a stone. GM-Daewoo lost $305 million in 2009, less than half of its 2008 loss. It still owes four Korean banks around a billion dollars, and despite recently paying back about $225m, GM’s division

will continue talks with [The Korean Development Bank] for a possible credit line in the long term as a standby loan to be used if the market turns down.

Of course, Arcamone predicts only good things. In expectation of a net profit this year, he says

We are absolutely on track as the global market is coming back and domestically new car launches this year will help us obtain that

So far this year, the numbers give reason for some optimism: GM-Daewoo’s Q1 sales totaled 166,127 units, up 23 percent from Q1 2009. Domestic sales saw the biggest percentage gain, up 43 percent, but at 26,644 units that business is only doing slightly more volume than the Leganza did in its best year on US market (2000, 24,826 units). That certainly doesn’t seem like enough business to justify the Daewoo brand. Especially if nearly half of those customers are already ditching the Daewoo badge in favor of the Chevy bowtie.

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24 Comments on “GM Doesn’t Euthanize Daewoo Brand, Adds Chevy Instead...”


  • avatar
    geeber

    As someone who was opposed to the Bush/Obama bailout of GM, I’ve been trying to keep my mind open to the possibility that this move really did work. Maybe the bailout will result in a “new” GM unencumbered by the bad habits and practices of the past.

    Only problem is that the new GM keeps acting very much like the old one. This story only further confirms that sad fact.

    • 0 avatar
      mhadi

      Well, yes. What did you expect?

      The tradegy is that GM was not liquidated. It’s the same badge-engineering, empty hype and crummy products as before – plus add more lies propagated by it’s management.

      TTAC is probably the only source of accurate information about GM and their antics.

  • avatar
    ott

    Well, GM was running low on brands… Maybe they can resurrect Pontiac and Saturn in Korea!

  • avatar
    undrgnd40

    the four people in the picture think it’s a good idea.

  • avatar
    gdd9000

    Is that Sarkozy pushing the Alpheon? ;-)

  • avatar
    Philip Lane

    I think we’re missing the point.
    Someone’s getting a 2.0 liter Camaro. This is the first reason I’ve seen not to buy a V6 Mustang.

  • avatar
    cdotson

    plus ca change, plus c’est la meme chose

    But I’m with Philip Lane…a 2.0T Camaro makes a modicum of sense, as would a 4cyl Ecoboost Mustang.

    • 0 avatar
      Robert Schwartz

      Only if you took about 100 lbs. off of them.

    • 0 avatar
      akitadog

      The replacement of the V6 with the 2.0T would do just that, take 100 lbs off the weight of the vehicle. It worked for the new VW Golf R.

    • 0 avatar
      Bancho

      I’m skeptical about assuming that it’ll be the 2.0T. The article doesn’t say anything beyond 2.0. I wouldn’t be surprised to see them use the NA 2.0 but I guess it remains to be seen.

    • 0 avatar
      ajla

      GM claims that they tested the 2.0T out of the Solstice for the Camaro while it was still in development.

      They decided not to use it because there was no fuel economy gain over the 3.6L.

    • 0 avatar
      Bancho

      I wouldn’t be surprised if there was a negligible cost difference as well. That’s why I’m unconvinced that they’ll put the 2.0T in there. For cost sake I could imagine them using the NA 2.0 in a base model of sorts for people who wanted the Camaro look at lower cost, performance be damned.

  • avatar
    BDB

    Why is it that whenever Detroit car makers buy up or merge with an Asian carmaker, it’s always some third or fourth tier player like Daewoo, Izuzu, or Mitsubishi?

    • 0 avatar
      cdotson

      Or Suzuki? I think the answer you’re looking for is “because they’re the ones that will have them?”

      Ford had the tie-up with Mazda, which while they’re small I don’t consider then *that* far down the automotive food chain. Second-tier definitely. To GM’s credit, they were previously tied up with Subaru until forced to liquidate their holdings just in time for Toyota to buy and ride Subaru’s ascension up the market share ladder.

    • 0 avatar
      BDB

      Ah, the Mazda deal is the exception. Mada is a second-tier brand but a very, very good one. Or “1.5″ tier. And their tie-up with Ford worked it pretty well for both sides, all things considered.

  • avatar

    It’s pretty sad when almost half of the customers repel the very own image of the company. That tells a lot about the power or credibility of that brand. When it comes to Chevy badges, it sounds more like my neighbor’s grass is greener.
    Creating two more brands doesn’t help. Sounds like Geo and Eagle revisited, this time on the other side of the ocean. For a brand to be successful, it has to have a real meaning not be just an advertising lip service.

  • avatar
    niky

    Richard Chen

    Is that 2.0 liter a V3?

    Wouldn’t that be more of a slant 3?

    (mental note, start popularizing new automotive terminology… we’ve got V6, I6, H6… /6?)

    —–

    It’s not too shocking that nobody loves the Daewoo brand. It was a really horrid brand to begin with. GM is missing a big beat there by not completing the rebranding of Daewoo they do almost everywhere else… but then again… what other company is more out of touch with what its customers really want?

  • avatar

    I’ll be the contrarian and say that it makes sense, sorta.

    Okay, so you’re a GM manager and you know that the Daewoo name is crap, even in Korea. You also know that if people tack on the bowtie, the Chevy brand has some value in Korea. Meanwhile they can’t just up and kill the Daewoo brand suddenly for reasons mentioned above. So what do you do?

    You introduce the Chevy brand with a splashy product, the Camaro, and start starving the Daewoo brand by introducing other new product as “unique” brands that will wear the bowtie as soon as GM can phase out Daewoo as a retail brand. The stores start out by adding Chevy signage, and eventually remove the Daewoo stuff.

    I might have branded the Veritas and the Alpheon as Chevys, but maybe GM didn’t want to lose cachet in China by selling one of their “Buicks” as a lowly Chevy in Korea.

    I can’t believe that GM isn’t killing the Aveo brand name. It means “Korean shitbox” in the US market. Since they’re claiming that the new version is a complete reworking, they’d be well served to rename it too. Besides, where does the Aveo slot? Is it between the Cruze and the Spark?

    • 0 avatar
      daga

      Except you move on in your never-ending 2 year rotations throughout GM and the next guy just assumes that 2 brands in the corporate strategy, and the new guy isn’t going to take the short term pain of closing a crappy brand, even if he knows the plan, he delays it until he moves on.

  • avatar
    rpol35

    “And it’s not like the Daewoo name is all that beloved in Korea either, as The General recently figured out…….”

    I think with all of the mayhem that regularly surrounds GM, including the debacle of their bankruptcy, a demotion is in order and we should start referring to them as “The Corporal”. They definately don’t deserve “General” status anymore.

  • avatar
    postjosh

    daewoo definitely has a poor rep in korea. i was making friendly conversation with my wife’s uncle who had recently retired from daewoo and was driving a lancetti. i said it seemed like a nice little car and he replied that it was crap. he has since bought an audi.

    the koreans really are envious of foreign brands. the taxes made imported goods unattainable. people thought that the camry was a luxury car because they were so rare and toyota was so esteemed.

    my father-in-law recently was thinking of replacing his azera (or grandeur as it’s badged in korea) with a chrysler. i told him unless he wanted a jeep, stay the hell away from the pentastar. i recommended a sonata which is what he’s going to buy. boring but sensible.

    the koreans are eager to buy our cars but with the crazy high gas prices over there, we need to export high mileage cars. i think the 4 cylinder fusion would be popular and the focus, too.
    i just hope that ssangyoung emerges from receivership. i really dug the chairman:

    http://en.wikipedia.org/wiki/SsangYong_Chairman

    and musso kicks ass:

    http://en.wikipedia.org/wiki/SsangYong_Musso

  • avatar

    What kind of brand is Chevrolet if they cannot even produce a small car as good as Daewoo?

  • avatar
    GarbageMotorsCo.

    “The General recently figured out that as many as 40 percent of all Korean Daewoo buyers were replacing their badges with Chevy bowties supplied by the aftermarket.”

    Around here they’re replacing the Chevy bowties with obama stickers.


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