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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (7530)	10/1/1999 9:25:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

Daewoo bullish on India-To draw at least 6% of global production from India. daewoomtrs.com Daewoo bullish on India News reports reveal that Daewoo Motors of South Korea has outlined plans to draw at least 6% of its global production of 2.5 m cars by year 2002, from Indian operations. Daewoo of South Korea has a presence in the country through its subsidiary Daewoo India. The 'Cielo', 'Nexia' (mid-car segment) and 'Matiz' (small car) are Daewoo's flagship brands in the Indian market. While the Cielo has struggled to post volume growth, due to sluggish demand, Matiz has fared well in view of robust demand in the small car segment. Daewoo's plans to increase production capacity in India to 150,000 units is very ambitious for two reasons. The first reason is its poor financial health of its parent, which is struggling to pay off creditors. The second reason why Daewoo's plans to boost car production in India seem a little ambitious is due to concerns of a supply glut in the country. A study undertaken by the Association of Indian Automobile Manufacturers (AIAM) reveals that by FY2000, combined car capacity will be at 1.3 m cars, while demand will be much lower at 500,000-700,000 m cars, implying that around half the capacity will be idle. In the face of sluggish demand in the domestic market, Daewoo will have to tap export markets in a big way to utilise excess capacity. It has already firmed up plans to use India as a base to export the Matiz to European and African markets. It will have to do the same with its other brands if it doesn't want to be saddled with excess capacity. October 1, 1999 (Probity)