• Oct 25, 2009
GM Daewoo has four shareholders: GM, Korea Development Bank, Suzuki Motor Corporation, and Shanghai Automotive Industry Corporation. When GM Daewoo put out a rights issue, only one of the four took the bite: GM, which made it rain to the tune of $412 million and raised its stake from 50.9.

Neither GM's move nor the non-interest of at least two other parties is surprising. SAIC is still gun shy about certain investments after the Ssangyong debacle, while Suzuki is more concerned with being courted by VW and the Kizashi's fate in the U.S. right now. It is GM that has every reason to strengthen its ties in Asia; after all, The General sold more cars in China last month than it did at home -- and with GM Daewoo.

Daewoo engineers small cars for GM, like Chevrolet's crucial acid test known as the Cruze, and last year, all told, GM Daewoo sold 1.9 million units. The financial infusion will be used for debts and to help the company's liquidity position.

[Source: Detroit News via GM Inside News]


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  • 26 Comments
      • 5 Years Ago
      So GM doesn't have the money to stay out of bankruptcy, but can somehow come up with $142m to increase its stake beyond the 51% that it already owned?

      Somehow I can't help but wonder whether this is the US taxpayer that just increased it's stake in Daewoo instead of GM.
        • 5 Years Ago
        GM is NOT going to consolidate all its passenger car engineering to Daewoo in Korea, just small cars. Small cars are Daewoo's specialty and with the investment that GM has made in the company, it only makes sense to use it. But it won't be used for cars like the Malibu or next Impala. Those will be done by the U.S. operations or Holden. And even though the Cruze was mostly engineered in Korea, it is getting significant revisions such as powertrain for the U.S. market. And of course the Volt is being engineered almost entirely in the U.S.

        GM won't be designing all their passenger cars in Korea, but you will see them leverage all their global assets in future vehicle design. And that makes sense.
        • 5 Years Ago
        GM China made a profit. Their year-on-year sales rose by about 20%. They have a positive outlook and have the largest market share there.

        Daewoo does the engineering for their small vehicles. Increasing the stake makes sense to me. You make more money by increasing your stake. In the long run, you stand to gain from your investment.

        Aveo was aweful. Chevy cruze in my opinion is the most important vehicle for GM. It should be able to out-compete Honda Civic. If it can do that, GM has a winner and will gradually gain market share.
        • 5 Years Ago
        actually they have the money to keep out of bankrupcy for the bankrupcy cleared all the debts and the shedding of none profitable brands and keeping the profitable ones is now making money. and so what if they borrowed taxpayer's money to try to stay in business. their bankrupcy is costing the taxpayers too like other businesses, so its lame to bash them for borrowing money that already started to pay back.

        • 5 Years Ago
        You got it big time. Taxpayer funded globalisation. You American socialists are still trying to take over the world but it is now government sponsored, thanks to George Bush who started the ball falling.
        • 5 Years Ago
        Ok, to the people posting how great of a company Daewoo is - that's not the point. GM owns (owned) a CONTROLLING STAKE in the company (51%). They could already control what it put out, utilize it's platforms for it's own rebadged cars, etc. They already had 100% control over the company.

        This $412m (typo in the first post) is nothing more than investing in the company in the hopes that it'll make money down the road. It's hoping that it's cash outlay will provide good returns as far as earnings and increased sales/profit in the years ahead. I'm NOT comfortable with GM accepting billions of dollars in taxpayer aid (that could very well never get paid back) and turn around make an investment like this.

        Pay the taxpayer back first, THEN gamble with your own money.
        • 5 Years Ago
        @ travisty

        > So GM doesn't have the money to stay out of bankruptcy, but can somehow come up with $412m to increase its stake beyond the 51% that it already owned?

        Daewoo is a rare case of one automotive asset "wanted" by everybody because of its engineering capability and low-cost supplier base. GM is desperate to keep Daewoo because GM plans to consolidate all its passenger car engineering at Daewoo(Cadillacs excluded), while the Korean government wants it back to form a second world class automotive group like Hyundai-Kia based on assets of Daewoo.

        GM would sell Opel, Saab, Hummer, Saturn, Holden and Pontiac, but would absolutely not sell Daewoo. Korean government is actually trying to bankrupt Daewoo while GM's desperately trying to keep it out of bankruptcy with US tax payer's money.
      • 5 Years Ago
      Let's hope that Daewoo can do better than the Aveo this time.
        • 5 Years Ago
        check for matiz creative, It the sparc for US. ITs already getting good reviews and safety ratings. Seems GM will sell only proved cars in world market to US now ( ex: Cruze, Matiz ceative etc )
        • 5 Years Ago
        @PJ,

        I'm sure it was dismal outside of the US. But here, the competition was a Rio that was based on decade-old parts, an Accent with less space, and an Echo and Scion xA that were more money. That changed, but the Aveo was certainly acceptable for the US for 2004. (In some ways, it's still better than the competition of today too, but that's another story.) It's wrong to fault Daewoo for GM's decision to sell a car that was fine in 2004 in 2010.

        I'm not saying this as a Daewoo fan (if there is such a thing?) or anything like that. The Lacetti/Suzuki Forenza is an obvious example of crap the company was trying to sell in an attractive wrapper. But at the Aveo's price point and given its competition here in the US, it was not a poor product.
        • 5 Years Ago
        No, the Aveo really was that bad. At introduction, it was better than the Kia Rio, but worse than the Hyundai Accent--and that was only in the then-depleted USDM subcompact market. In the Euro and UK markets, where the Jazz (Fit), Clio, Polo, etc. were on sale, it was pretty thoroughly ridiculed.
        • 5 Years Ago
        bh, what competition are you speaking of seriously
        • 5 Years Ago
        The Aveo was better than the competition in 2004. It's not Daewoo's fault that GM was content to keep selling the 2004-era car indefinitely.
      • 5 Years Ago
      The Cruze seems to be far better than the outgoing Cobalt.
      • 5 Years Ago
      With the exception of the C-pillar, the Cruze looks better and better every time I see it.

      Silly, silly name, though. Why not continue Cobalt or call the new one Nova or Monza?

      It'd be a lot better than trying to create brand awareness all over AGAIN, from nothing, with the Cruze. Just like they did with the Cavalier-Cobalt transition.

      Ford has had the Focus name in NA for 10 seasons now. The Sentra name has been around since '83. Corolla since '68, Civic since '73, Elantra since '92, Jetta since '80, Impreza since '92, Lancer since 2002.

      Only Suzuki (Esteem-Aerio-SX4), Kia (Sephia-Spectra-Forte), and Dodge (Shadow-Neon-Caliber) have changed their compact models' names 3 times in recent history.
        • 5 Years Ago
        Funny, the Cruze looks older and older the more I see it.
      • 5 Years Ago
      @ Richard S.

      I don't have the year on year info, but for Sept. 2009, GMDaewoo had 10.4% of the domestic sales in Korea (14,282 units). In August 2009, they hade about 8%. Safe to say, their total year on year market share is around 10%. That's of domestic sales.

      When looking at exports, GMDaewoo has about 25% of all exports from Korea (136,750).

      • 5 Years Ago
      I got stuck with an Aveo for 3 weeks from Enterprise while my car was in the shop a few months back and IT WAS, in fact, THAT terrible. The aux jack was the only thing that kept me from walking to work every day.
      • 5 Years Ago
      GM Daewoo sells a very elegant version of the G8. I really think this car should have been an Impala here in the states.

      http://idc.gmdaewoo.co.kr/gmmcc/gmmcc_ver.jsp?carID=veritas&contentsID=&path=null

        • 5 Years Ago
        My personal favorite variant is the China-market Buick Park Avenue... I do like the Veritas, though.
        • 5 Years Ago
        there is no way GM would, they are still too busy selling the decrepit piece of carbage that is the current impala to the fleets. Atleast when it comes to rentals, the american way is to throw the most horrid thing you can come up with at Hertz in the hopes that people would rather just buy a car for their trips.
        • 5 Years Ago
        That's the Holden Statesman, not the Holden Commodore (the latter is the G8 here).
        Anyway, I like the Chevrolet and Holden variants' looks much better than this.
      • 5 Years Ago
      I live in Korea and I've driven the GMDaewoo Lacetti Premier (what the Cruze is called here). It's a good car. I almost bought one. The price point was GREAT. $13,500 MSRP for leather interior (heated front seats), 17-inch rubber, push-button start with smart key, six disk in-dash CD player, rain-sensing wipers, one-touch auto up/down on ALL FOUR power windows, rear parking sonar assist, and so on. Probably could of bought it for $11,400!!! Great price!! Stylish car for that class and that price. Nice interior, although it feels a little cramped and some of the plastics are too hard for my liking.

      Why didn't I buy it? Well, little things really, but a few big things too. First, the little things. It didn't have a USB jack. Not a big deal, but since the export model did, I was pissed that they didn't put it in the domestic model. Second, it didn't have cruise control. Keep in mind, not many cars in Korea have cruise. In fact NONE in this class do, heck not even the Sonata or Grandeur (Azerus) have cruise in Korea. But the export model of the Lacetti does have cruise, so again I was pissed that they didn't take the initiative to be a class leader in Korea and offer cruise on the domestic car.

      Now the big things. The 1.6 liter engine in the Korean domestic model is rated at only 114 horsepower and 30 MPG combined. A Hyunda Avante (Elantra) is rated at 124 (+10 over the Lacetti) and 37 MPG combined (+7 over the Lacetti) So, as the saying goes... you get what you pay for. Less money for the Lacettia (Cruze) means less power AND less mileage.

      Also, the rear torsion beam suspension makes for a terrible ride. It's hard to explain, but on some roads in Korea, if there's a sharp curve, the road will have these 2-foot wide strips of rough ashphalt (they're supposed to increase traction). Don't get me wrong, they are not speed bumps or rumble strips or anything like that. In fact, I'd guess that they're not even a 16th of an inch high. But driving over them in the Lacetti while talking to my wife, my voice literally sounded like an opera singer... my voice was literally shaking (vibrato) from these stips of rough ashpalt. I've driven over that road hundreds of times in my Hyundai Avante (Elantra) and never had anything like that, mind you it has an independent rear suspension. So again, you get what you pay for.

      They've made a good car in the Lacetti, but not a great car. It has a fantasic price point, but they had to cut corners in the two areas that matter most to me: the engine and the suspension. I'd have a traditional key ignition (not push-button) and skip the heated seats and rain-sensing wiper if it meant I could have a better rear suspension and an engine with at least as much power and fuel economy as the competition.

      I've read that GM (and/or Daewoo) put BIG money into developing the structure of this car so that it would get good crash test rating. Well, it did, but you know what... I really don't give a rat's ass about crash safety. Again, I'd rather have more power, better fuel economy, and an independent rear suspesion and a 4-star crash rating, than not have those things but have a 5-star crash rating. I can use more power, better fuel economy, and an independent rear suspension every single time I drive the car, but how often will I benefit from a 5-star crash rating? Never!!!!

      In summary. Good car. Great price. Lots of equipment and a safe car if you're the type of person who crashes a lot. I'm not and I want a great car at a good price. Not the other way around.
      • 5 Years Ago
      if you look elswhere beyond the U.S., all those cars, had name changes in the U.K. the Corolla now exists as the Auris. the Jetta in Europe at one time was known as the Bora, the Elantra in Europe is now the i30 the Chevrolet Kalos, is now the Chevrolet Aveo the Nissan Sentra was called Sunny before its name change, then now its known as the Almera, and in Korea its known as the Renault-Samsung SM3. name changes is done all over for market capture. so now with the cavalier-cobalt-cruze thing, it was to market the car according to the car is new from the ground up. the cavalier was on the market for 10 years, the cobalt for 5, and both cars, though they sold well, they were thought of crap. cruze is the new world car as the 2 previous weren't and it so far is selling well according to publications. it should do so here in the u.s. because of massive refinement. only those who drive toyotas and hondas after driving 1980's gm cars will call it crap without looking
      • 5 Years Ago
      "But at the Aveo's price point and given its competition here in the US, it was not a poor product."

      You have got to be kidding. And by the way, its "low price" was entirely the result of every single feature being optional -- $450 for a CD player? Horrible.

      The only good thing you could say about the Aveo in 2004 was that it was better than the Cavalier. Barely.
      • 5 Years Ago
      Let's hope that when this car comes to America as a replacement for the Cobolt that it generates sales that GM needs, you all know what I mean, and at least it is competitive to the Civic, Corolla, and Mazda3. I hope that the Cruze stays as the Cruze not another named model. I also agree about the Aveo, but if you are a college student and the Rio, Accent and Aveo were the only ones in the market, from what I can remember, and the rest the Fit, Versa and Yaris (although I believe that was the first to come to challenge the Korean automakers in that price range). I had a 2004 Accent and it was a way better car than the Aveo. I am not a big GM fan but the new Cruze can make it or break it for Chevy because this car has a lot of competition to deal with in the compact car market.
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