Largest conglomerate after Hyundai Group in Korea followed
by LG group and Samsung group.
Daewoo Group was founded by Kim Woo-jung in March 1967.
Daewoo initially concentrated on labor-intensive clothing and
textile industries that provided high profit margins because of
South Korea's large and relatively inexpensive workforce.
Later diversified into trading, construction, automotive, etc-
Expanded efforts in the automotive industry and was ranked
as the seventh largest car exporter and the sixth largest car
manufacturer in the world. Automotive became one the most
In 2001 had its operations in 123 countries.
Faced tough competition in European and US market it looked
to diversify it into Eastern Europe, Latin America and Asia.
Took over 50% equity held by Japans' Toyota in DCM-TOYOTA
Renamed it as Daewoo motors India ltd
Overseas investment on borrowed funds
In 2000, company’s labor union refused to accept a
restructuring plan for the company
Daewoo was declared bankrupt
* Daewoo entered in Indian market with Cielo in 1995
followed by Nexia and Matiz.
* Projected to become the 100bn company by 1998-99
* Implemented strategies to increase sales with poor
* 70000 customers cancelled their booking
* Recorded a loss of 351.4 million in 6 months as sales
also declined to 1.22 billion from 2.7
*They borrowed foreign debts for further
*Introduced the concept of direct selling
*Price competitiveness and attractive servicing
and warranty offers gave rise to good demand
in the international market.
*They also introduced heavy discount to attract
*Entered the small car segment to attract more
customers with Matiz.
*Did not consider itself worthy to challenge Maruti in
small car segment
*There were not enough players in the mid-size
segment, Daewoo thought that it would stand a fair
chance in capturing this segment.
*Daewoo found the mid size market more alluring.
*Daewoo could not visualize that the small sized
segment would grow at a faster pace than the
segment it decided to enter in.
*The mid-sized segment got crowded with players
like Opel, Maruti, Honda and Daewoo itself.
*It has around 110 dealers all over India.
*Over 100 Authorized Service Centres to cover the
*Appointed 14 exclusive LCV dealers across the
country to take care of sales and service
* Diwali bonanza scheme for the corporates.
* Lottery schemes for individuals
* Test drive scheme
* Hefty price cut
* Val you Campaign
Launch of operations in extremely hurried manner.
Inefficient Production Plant
Over estimation of the market demand
Changes in positioning (rich luxury car to premium family car to
value for money car).
DECLINE OF CIELO
Focus on Cielo not Daewoo as a
Focus on Daewoo as a Brand not on a
Oct 1998- MATIZ was launched.
23,265 units in Apr-Dec 1999, demand increased by 52.2 %
to 35,398 units Apr-Dec 2000
Further Cielo took a back seat after MATIZ success globally
Replaced Cielo, GLE and GLX with EXECUTIVE and NEXIA but
customers failed to see any difference
Advertising of CIELO stopped
MATIZ was operating in 114 countries
Failure in INDIA due to SANTRO
• Strong brand portfolio
• Technology potential
• State of art plant
• Huge debts
• Aggressive expansion
• No training to sales staff
• Lack of proper marketing strategies
• Huge discounts
• Few players in mid-size
• Regional Tie Ups
• Well established
• Fluctuation in price of
fuel and raw materials
• Government policies
* Merger with General Motors in 2001
* General motors took control over daewoo motors
* Matiz was restructured as Chevrolet Spark
* It went into new models since then
* Now the latest model is known as Chevrolet Beat
*The DAEWOO commercial vehicle division was
sold to TATA MOTORS.
Daewoo had a good feature rich product, which was more advanced than its
direct competitor(The Esteem), but it was let down by poor fuel efficiency.
Although Daewoo was not as far spread as Maruti Udyog Limited, it had a
fairly good reach for a new entrant.
Ineffective marketing was the most probable cause for the fall of Daewoo in
It confused Customers with its constantly changing promotional strategies
ranging from positioning the car as a premium product to offering unheard
discounts on the same.
Initially the company introduced the car as a premium product, pricing it
above competition. However when things did not pan out in their favor, the
price cuts that followed were very drastic, and ironically accelerated the
*Globally successful strategies may not always work in
certain geographies, careful customization is a must for
*Price cuts should not appear to be a desperate attempt to
survive, instead must be done subtly enough to boost sales
without tarnishing the product’s image.
*Stick to your strategies- A complete overhaul is not always
the best option, the emphasis should be on making plans
work, not changing plans.
*Daewoo could have also benefitted from showcasing its
strength’s rather than justifying it’s weaknesses.(poor