Australian – Korean Car Business

Holden’s has been supplying four-cylinder engines for the past 20 years to Daewoo. Now cars will be flowing again to Australia.

GM Daewoo to begin Australian exports

MELBOURNE, Australia – GM Daewoo Auto & Technology Co., Korea’s third-largest automaker, said yesterday that it would develop, produce and export “tens of thousands” of vehicles to Australia beginning in the second half of this year.

The company said it will develop and manufacture cars especially for General Motors Corp.’s Holden nameplate. The announcement followed GM Daewoo’s introduction on Monday of the Korea-bound Statesman, which is based on a Holden large sedan.

“We are proud to be adding Australia and Holden to the growing roster of markets and brands that have selected GM Daewoo’s Korean product development and manufacturing expertise to help meet their product needs. Holden is the premier vehicle brand in Australia and has that nation’s strongest sales network,” said Nick Reilly, chief executive of GM’s Korean division.

Chairman Denny Mooney of Melbourne-based Holden suggested that the two GM affiliates are jointly designing and developing a range of models, including a sport utility vehicle, as both are interested in the SUV business.

“We plan to introduce the SUV to the Korean market early next year. We will acquire the Bupyeong plant by the second half of 2006 if it meets the four criteria,” said Reilly regarding the factory owned by Daewoo Incheon Motor Co., a remaining unit of the former Daewoo Motor Co. The world’s largest automotive group plans to acquire the plant if it meets certain levels of productivity, product quality, labor stability and day and night shifts for six straight months.

“By 2007, we will have fully introduced the SUV, the large car and new diesel models which are the enablers to increase our market share. With the relaunch of some of our existing models, we project GM Daewoo’s domestic market share to fall between 15 to 20 percent by then,” he said.

GM Daewoo’s current market share is around 10 percent, after Hyundai Motor Co. and Kia Motors Corp.

Holden plans to bring in GM Daewoo’s small four-cylinder engined vehicles such as the Lacetti and Kalos, as they fall under the fastest growing segment in Australia, although specific model names and official timing will be announced later.

GM Daewoo designs, develops and assembles a range of vehicles that are sold in more than 150 countries and territories under some of the GM Group’s leading brands including Daewoo in Korea; Chevrolet in parts of Asia-Pacific, Europe, North America and Latin America; Buick in China; and Pontiac and Suzuki in North America.

“Capitalizing on GM Daewoo’s capabilities to build the Holden portfolio will further strengthen the relationship between the two key members of the GM family in the Asia-Pacific region and two successful exporters. At the same time, it will play an important role in enhancing two-way trade between Korea and Australia,” said Mooney.

The Korean company has been supplied with Holden’s four-cylinder engines for the past 20 years even before it became a GM unit. The GM Daewoo Technical Center and Holden’s design center have worked together on many projects and collaborate closely in areas such as chassis and engine performance. Holden has assigned senior designers to work at the Korean division’s design center in the western port city of Incheon.

GM Daewoo was established in 2002 when GM bought almost half of its shares after the former Daewoo Motor Co. went bankrupt during the financial crisis of 1997-98.

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