Offshore, GM soars with Chevy brand; GM Daewoo boosts sales, production
JASON STEIN | Automotive News
Posted Date: 6/9/05

DETROIT -- Here's what was missed in the news about General Motors' distressed brands and sluggish U.S. sales: While GM sliced third-quarter North American production by 100,000 units, it increased Asian production forecasts by 100,000 units.

GM sales in Europe, Asia, Africa and South America have grown this year. And its engine for growth is Chevrolet, the venerable high-volume brand that has enjoyed a rebirth overseas.

While GM is trimming its product lineup for slow-growth brands such as Buick and Pontiac, it has expanded the Chevrolet line. The automaker has rebranded Daewoo-built cars and trucks as Chevrolets, and those vehicles are finding a market overseas.

From January through April, Chevrolet sold nearly 1.4 million vehicles worldwide, a year-to-year increase of 8.2 percent. GM Daewoo Auto & Technology Co. "has provided a terrific source of product development capability that we really need," GM Chairman Rick Wagoner said at an analyst meeting this year.

Daewoo Motor Co. Ltd. was a bargain for GM and other investors. In 2002, GM spent just $250 million to take over the principal assets of the bankrupt Korean automaker.

Since then GM already has spent $1 billion to beef up Daewoo's product development and has earmarked an additional $2 billion for that purpose.

GM Daewoo expanded its engineering and design staffs and has 1,800 engineers and 80 designers, Ki Joon Yu, vice president of engineering for GM Daewoo, told Automotive News last fall.

With its bigger engineering staff, the Korean automaker will help GM's U.S. engineers redesign the next-generation Saturn Vue and Chevrolet Equinox SUVs. GM Daewoo also will have a chance to engineer GM's Gamma architecture, which is the basis for the Opel Corsa.

Here's how Chevrolet is doing in each of its major markets:

>> In Europe, Chevrolet sales rose 24.5 percent through April. The Chevy Kalos and Aveo are enjoying especially heavy demand in Poland, Russia and the Ukraine - price-sensitive markets that value low-priced transportation.

The brand also has found a niche in more prosperous western Europe. "Everything is growing fast, and it's all due to Chevy's startup in those places," says GM Europe spokesman Marc Kempe.

>> In the United States, sales of the Chevrolet Aveo are up 56.1 percent through May. Next, GM might import a sport wagon based on the Daewoo S3X, a small sport wagon concept introduced at the 2004 Paris auto show.

>> In South America, Africa and the Middle East, Chevrolet sales rose 19.2 percent through April. And GM Daewoo is doing more than its share. Jaime Ardila, GM's CFO for the region, predicts GM Daewoo sales will rise at least 50 percent this year. "GM Daewoo is the driver," he says. "It has been incredibly successful for us."

>> In Asia, Chevrolet is using Daewoo-designed vehicles to fuel its expansion. GM China assembles and sells two cars - the Spark and Epica - based on Daewoo vehicles. Now GM China is building a network of 150 Chevrolet dealerships to sell these and other vehicles.

Meanwhile, GM wants to purchase an assembly plant in India to produce a minicar based on the Daewoo Matiz.

GM insiders brag that Daewoo is their version of Hyundai Motor Co. - an automaker with a relentless ambition to expand. Before GM acquired the company, Daewoo ran into trouble when it expanded too quickly.

But now GM hopes to exploit that corporate culture to compete in the world's fastest-growing markets. "There is a real sense of urgency on the part of the management team," says GM spokesman Jay Cooney. "This opportunity doesn't come along very often."