Daewoo cielo’s decline in india from 1990 to 2013

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daewoo's decline in india

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  • Sales started to decline over the years
    Introduced many schemes to increase sales
  • Daewoo cielo’s decline in india from 1990 to 2013

    1. 1. * Presentation By: GROUP 8 JAGAT MISHRA 1321118 NIRAJ AGARWAL 1321128 NAMIT SAHAI 1321127 K.T.BOPANNA 1321121 SIKTA MISHRA 1321164 ARCHANA BHAT 1321146
    2. 2.  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- 20 divisions.  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 important venture. In 2001 had its operations in 123 countries.
    3. 3.  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
    4. 4. * 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 market research * 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
    5. 5. *They borrowed foreign debts for further expansion *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 global customers *Entered the small car segment to attract more customers with Matiz.
    6. 6. * *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.
    7. 7. * *It has around 110 dealers all over India. *Over 100 Authorized Service Centres to cover the entire country. *Appointed 14 exclusive LCV dealers across the country to take care of sales and service requirements.
    8. 8. * Diwali bonanza scheme for the corporates. * Lottery schemes for individuals * Test drive scheme * Hefty price cut * Val you Campaign
    9. 9. Launch of operations in extremely hurried manner. Inefficient Production Plant Over estimation of the market demand Scheme Failures Changes in positioning (rich luxury car to premium family car to value for money car). DECLINE OF CIELO
    10. 10. ADVERTISEMENT/PROMOTIONS 1994 1999 Focus on Cielo not Daewoo as a Brand Focus on Daewoo as a Brand not on a particular Product
    11. 11. 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
    12. 12. STRENGTHS • Strong brand portfolio • Technology potential • State of art plant WEAKNESS • Huge debts • Aggressive expansion • No training to sales staff • Lack of proper marketing strategies • Huge discounts OPPORTUNITIES • Few players in mid-size segment • Regional Tie Ups THREATHS • Well established competitors • Fluctuation in price of fuel and raw materials • Government policies
    13. 13. * Merger with General Motors in 2001 * General motors took control over daewoo motors in 2002 * 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.
    14. 14. PRODUCT 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. PLACE Although Daewoo was not as far spread as Maruti Udyog Limited, it had a fairly good reach for a new entrant. PROMOTION Ineffective marketing was the most probable cause for the fall of Daewoo in India. 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. PRICE 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 company’s downfall.
    15. 15. *Globally successful strategies may not always work in certain geographies, careful customization is a must for success. *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 fuel)

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