SA: Daewoo deal a wise move by Holden

00-00-0000
SA: Daewoo deal a wise move by Holden

By Tim Dornin, National Motoring Correspondent

ADELAIDE, April 22 AAP - Australian car producer Holden appears to have backed a winnerwith a decision to take control of Korean car maker Daewoo.

In October last year, Holden spent $455 million for a 42 per cent stake in the Koreanoutfit after parent General Motors agreed to bail out the embattled company.

The deal also helped secure Holden's existing engine exports to Daewoo, but was notwithout risk considering a slide in Daewoo's own vehicle exports and domestic sales andits precarious financial position.

But now Daewoo believes it will double exports to 250,000 units this year, and expectsthat will rise to 300,000 units in 2004 as shipments to North America and the Middle Eastresume.

Daewoo said aggressive marketing and zero interest financing in Korea would also liftdomestic demand to 510,000 vehicles this year, up from 377,000 last year.

The results are all good news for Holden which wants to increase its export trade in Asia.

It could also help the Australian producer break into the lucrative Chinese market.

In Australia, Daewoo is still struggling to lift sales, although a batch of new releaseswill help in coming months.

To the end of March this year, the company retailed 1,489 cars, well down on the 2,664it sold in the first quarter last year.

But Daewoo dealers have reported renewed interest following the GM backed Holden takeoverwhich has helped boost consumer confidence in the brand.

When it announced the takeover last year, Holden's director of sales and marketing,Ross McKenzie, said the aim was to lift annual Daewoo sales in Australia above 20,000units by the end of 2004, a level last achieved by the company in 2000.

"We see a fantastic opportunity here for Holden and Daewoo," Mr McKenzie said.

AAP tjd/tnf/jlw

KEYWORD: MOTOR DAEWOO