Daewoo has failed in the car market indeed; however, Daewoo
Corporation is still alive in other markets such as Chemicals,
Commodities, energy, machinery and plants, media and electronics,
metals and textiles. Therefore, I presumed that you are talking about
the car industry.
SIC Codes: 4213 Trucking, except local; 5169 Chemicals & allied products, nec
NAICS Codes: 424690 Other Chemical and Allied Products Merchant Wholesalers
484121 General Freight Trucking, Long-Distance, Truckload.
Main Competitors: Hyunday Corporation, Kia Motors, LG International,
Samsung, SK Corp.
The failure of Daewoo Motors in the car market is due principally to
bad management in other words management was trying to expand Daewoo
market share to soon with respect to international competition. For
example Daewoo did not have a good return on its investment in India
and trouble arose. Please refer to the following article for research
and educational purposes only:
NEW DELHI - Daewoo Motors (India) Ltd (DMIL) has plunged into the red
with a net loss of Rs. 10.
279 words
2 December 1997
Business Line (The Hindu)
English
(c) 1997 The Hindu Business Line
73 crores for the six-month period ending September 1997. The company
had made a net profit of Rs. 28.15 crores for the corresponding period
the previous year and a net profit of Rs. 1.43 crores for the full
year ended March 1997.
Net sales and income from operations also dipped substantially to Rs.
168.79 crores for the first half of the current fiscal compared to Rs.
428.10 crores for the same period the previous year. Interest burden
increased more than five fold at Rs. 22.92 crores (Rs. 4.36 crores).
The paid-up capital as of March 1997 was Rs. 511.18 crores and
reserves stood at Rs. 286.40 crores.
A company statement said that its performance is expected to improve
significantly after facilities of engines, transmissions and other
components become fully operational. However, industry sources feel
that the sales target of Rs. 800 crores for 1997-98 announced by
DMIL's Managing Director, Mr. S.G. Awasthi, does not seem achievable.
CALCUTTA: Assambrook Ltd, a tea company having two gardens in Assam
and four gardens in Wynaad district of Kerala, has posted improved
results for the six months ended September 30, 1997 compared to the
corresponding period last year.
According to a company release, total income during the period
April-September 1997 stood higher at Rs. 19.07 crores compared to Rs.
14.57 crores during the six months ended September 30, 1996. Net
expenditure was marginally higher at Rs. 16.02 crores (Rs. 13.27
crores).
(c) The Hindu Business Line.
Therefore, in order to profide a quick fix to the net income problem
and thus increasing profit Daewoo had to cut price. Please refer to
the following article for research and educational purposes only:
Daewoo Motors' Indian Unit Cuts Prices Of All Its Cars By Over 20%
456 words
5 January 1998
02:06 pm
Dow Jones Online News
English
(Copyright (c) 1998, Dow Jones & Company, Inc.)
NEW DELHI -(Dow Jones)- Faced with increasing competition and a sharp
decline in sales, Daewoo Motors India Ltd., a subsidiary of South
Korea's Daewoo Motor Co., on Monday cut prices of all its cars by over
20%.
Company officials said the cut was done to pass lower production costs
on to consumers, although some agreed the fall in sales prompted the
move.
"On the whole, we have a very positive cost advantage on the Cielo
(model) now, with over 70% of the car locally made," Managing Director
S.G. Awasthi said.
Awasthi, however, agreed there has been a sharp decline in sales of
Daewoo cars in India to a projected 12,000 to 13,000 during the year
ending March 31, from over 15,000 in the previous financial year.
"But this is because of a negative growth in the sales of all
mid-sized luxury cars in the Indian market," he said, adding that
sales in this segment are expected to fall to around 34,000 cars
during the 1997-98 year from 50,800 last year.
For some models, such as the Cielo GLE, which is the most expensive
model sold in the Indian market, Monday's price cut was nearly 27%,
falling to 490,000 rupees ($12,487) from 620,000 rupees.
By making the Ceilo the least-expensive car in this market segment,
Daewoo hopes sales in the last three months of the financial year will
help the company meet at least the newly lowered targets.
Awasthy said Daewoo is completing work for the launch of its much
awaited small economy car for the Indian market. The car is expected
to be displayed at an auto exhibition in New Delhi beginning on Jan.
15 and will be available commercially from the second half of 1998, he
said. He didn't provide the expected purchase price.
Daewoo buses will be introduced in India in the first quarter of 1998
and trucks in the second quarter, he added.
Awasthy said Daewoo also plans to launch a second luxury car in the
first half of 1999, but didn't provide further details.
Daewoo Motors India has already invested 27 billion rupees in a
production plant near New Delhi and plans to invest another eight
billion rupees before the end of 1999.
This investment will take production capacity to 125,000 passenger
cars and 15,000 commercial vehicles within a year.
In the second phase of expansion, passenger-car production capacity
will be doubled to 250,000 a year, Awasthy said.
Daewoo Motor is unit of South Korean conglomerate Daewoo Group.
The quick fix of cutting prices provided temporary relief for Daewoo
had surpassed Hyunday Motors in car sales in 1998. However, Daewoo
financial storm did not subside not only in India but in Russia,
Hungary and America as well. In the end I think Daewoo failed in the
car business because of its market diversification strategy. The
corporation was in several markets competing with giants like Sony,
Toyota, and Honda.
For Daewoo to make a comeback they need to craft a business strategy
where they can focus on the car industry with great resolve.
Here is some of Daewoo financial data:
Balance Sheet Dec 02 Dec 01
Assets
Current Assets
Cash 113.9 106.0
Net Receivables 313.9 301.3
Inventories 77.5 61.0
Other Current Assets 120.3 99.1
Total Current Assets 62.6 567.4
Net Fixed Assets 216.1 234.4
Other Noncurrent Assets 570.5 453.2
Total Assets 1,409.7 1,255.0
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable 320.4 264.7
Short-Term Debt 41.4 44.5
Other Current Liabilities 148.7 117.1
Total Current Liabilities 510.5 426.3
Long-Term Debt 407.1 470.0
Other Noncurrent Liabilities 122.8 136.3
Total Liabilities 1,040.5 1,032.6
Shareholders' Equity
Preferred Stock Equity 0.0 0.0
Common Stock Equity 369.2 222.3
Total Equity 369.2 222.3
I hope I answered your question well. |
