Automotive Recyclers Association - Archive

Online Resources:

• Daewoo USA
• Daewoo Cars Fan

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Daewoo Cars

Daewoo Motors, the automobile division of defunct South-Korean conglomerate Daewoo Group, is indeed more interesting from the founder's story point rather then the automotive company's historical significance. Once an esteemed and revered businessman, Kim Woo-joong (Kim Woo Choong), was found guilty of embezzlement and accounting fraud, and subsequently, sentenced to prison for ten years in 2006. He was later pardoned in 2007. As the founder and former chairman, he still maintains his innocence contending that he was only doing what was expected in an environment that previously mixed business with politics, rewarding profitability, expansion and ambitious political alliances.

Kim Woo-joong started Daewoo Industrial Corporation in 1967. Most of his holdings came from turning around unstable companies that the government had given him. He continued to change the face of South-Korean economics by employing as many as three-hundred thousand people worldwide, and building one of the biggest enterprises in the country, with estimated revenues of twenty billion dollars in 1997. The company's exponential growth, however, was mostly due to the fact that he had a favored position with the government. As a result, he was awarded financing, tax concessions, expansion permits, export licenses, and the elimination of tariffs. In return, Daewoo was obligated to invest and build in areas that were designated by the government.

Two historic factors then prompted the collapse of Daewoo, and the demise of Kim Woo-joong. South Korea's leader was assassinated in 1979, which lead to the crumbling of government favors, and in 1997, a financial crisis slammed the country's marketplace, enabling the government to eventually step in and dismantle Daewoo, a company laden in debt. Ironically, Daewoo meaning “great universe” was about to implode.

In relation to the specifics of Daewoo Motors, Woo-joong's vision was to become a major international automaker. This was even of more interest to him than the other divisions of the company. He sought to have Daewoo factories worldwide and made deals with many foreign governments. In 1972, General Motors invested in half the company but finally left in 1992 due to management conflicts. Not surprisingly, there seems to be contradicting stories in who ended the relationship, as some say GM and others say Daewoo.

Interesting Tidbits in Daewoo's Automotive History:

• In 1997, before the financial crisis hit, Woo-joong tried to sell half of Daewoo to GM for seven to ten billion dollars. After the bankruptcy, GM ended up paying a mere four-hundred million, even though they had previously bid five billion.
• In 2000, Daewoo was automatically placed into bankruptcy because, under South-Korean law, any company that permits a payment on commercial papers to lapse at least two consecutive days is considered bankrupt.
• At the time of bankruptcy, taking into account all plants worldwide, the company had the ability to produce two-million cars per year.
• 2002, Ford seriously considered purchasing the bankrupt company when they won against GM in an auction set out by the government, but in the end decided against the deal.
• GM purchased controlling interest in 2002 and created General Motors Daewoo Auto & Technology Company. Hoping to leverage Daewoo's small car know-how with their own expertise in engineering and distribution, they were sure that the newly formed company would be a huge success.
• According to a February 2003 interview with CNN, Woo-joong indicated that “Daewoo aimed to enter emerging markets with long-term growth potential and relatively few competitors. So Kim built a dozen offshore auto plants in such places as Poland, Ukraine, Iran, Vietnam, and India...His plan was to make two million cars, half of them outside Korea, by the year 2000. By 1999 he had already reached 1.6 million”.
• In June 2009, various business journals indicated that Daewoo sales were down fifty-eight percent in Russia.
• Daewoo recently lost its third position place in South Korea to Renault-Samsung.
• Hyundai and Kia are strong competition in the domestic market.
• It is actually difficult to get clear information on current financial and statistical data, but it is reputed that GM Daewoo is sold in over one-hundred and forty countries and is not only sold under the name Daewoo, but also Chevrolet. In fact, the Chevrolet Aveo is really a Daewoo Kalos.

Various Models and Years Released:

• 1990 Espero
• 1991 Damos Microvan
• 1991 Labo Pickup
• 1994 1.5I
• 1994 Cielo
• 1997 Nubira
• 1997 Lanos
• 1997 Leganza
• 1998 Matiz
• 1999 Korando
• 1999 Musso
• 2000 Tacuma Minivan
• 2002 Kalos
• 2002 Lacetti
• 2005 Lacetti X
• 2006 Captiva
• 2007 Gentra X
• 2007 Tosca
• 2008 Veritas
• 2008 Winstorm Maxx
• 2009 Lacetti Premiere