GM Daewoo hopes for return to profit

GM Daewoo Auto and Technology Co. hopes to raise domestic sales by 20 percent from last year, and push up its market share into the double digit range this year, its chief executive said yesterday.

Mike Arcamone said in a press conference in Seoul that 2010 will be a turning point for the company and that he plans to make it profitable again this year.

Arcamone said that the company aims to export 1.6 million units, including complete knock down units.

"2010 will be a year of change at GM Daewoo. First we are making significant changes in our strategy in the home market," Arcamone said. "The objectives are aggressive and challenging. The top priority is to become profitable, and I believe that it must be achieved in 2010."

The CEO said that the launch of the manual transmission Matiz Creative city car, a new sport utility vehicle and an upper mid-sized vehicle and the multiple retailer system will support the company`s drive to meet the targets.

"The industry is growing and we have seen some changes in government policies, but we still see growth and hope we can be part of the momentum," Arcamone said, adding that Korea is a very good market for SUVs and that he considers the company to have the right products for the market.



Concerning the company`s financial status, Arcamone said that it was "very solid" and that GM Daewoo is not currently seeking any further support from the Korea Development Bank.

Other changes the company plans to make this year include changing the company`s colors to green, improving labor management relations and strengthening its offshore businesses.

In addition, Arcamone said that the company will launch its first hybrid electric vehicle in Korea, and bring in 10 Volt electric cars for testing next year.

The company`s executives also confirmed that it has severed ties with Daewoo Motor Sales Corp. in favor of the new multiple retailer system.

Arcamone said that the company came to the conclusion that terminating relations with Daewoo Motor Sales was best for GM Daewoo and that the decision was "final and irreversible."

"We have elected to terminate relations with Daewoo Motor Sales. It was very well thought out, and the best way to achieve the targets is to go in another direction," marketing and sales vice president Rick LaBelle said. He added that issues concerning the Chevrolet brand did not play a role in deciding to part ways with Daewoo Motor Sales.

"The fundamental change is that we have more agents. It brings fresh investment and thinking into the system. From a consumer perspective, agents will be backed by more than one retailer. We will continue supplying vehicles to agents formerly supplied by Daewoo Motor Sales, but that the company is not considering direct sales as a long term strategy."

Concerning the introduction of the Chevrolet brand to the local market, Arcamone said that he has reached a decision saying that it was crucial to the company`s future.

However, he said that the formal announcement of the decision will be made in mid May or within the next eight weeks saying that the decision needs to be discussed with GM Daewoo employees first.

In terms of branding, Arcamone said that many scenarios following the possible introduction of the Chevrolet brand are being considered including keeping the current brand name, replacing it with Chevrolet or allowing the two to coexist within the Korean market.

(cheesuk@heraldm.com)



By Choi He-suk