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
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.