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GM Daewoo to Lead GM's Minivehicle Programme

Published: 10/12/2006 by Lawrence Makovich
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General Motors Daewoo Auto & Technology (GMDAT) will develop GM's new minivehicle platform for global sales.

Global Insight Perspective

 

Significance

GMDAT is already developing GM's next-generation subcompact (B-segment) platform for global use and it is natural that it should develop the replacement for the A-segment Matiz given its track record and experience in the segment.

Implications

GM is targeting emerging and mature markets with the new minivehicle architecture and will look to raise its global minivehicle sales to 400,000 units annually.

Outlook

GMDAT's reputation for bringing in development projects on time and under budget ensures continued investment in the South Korean arm. This latest announcement, combined with the commitment to develop larger cars in conjunction with GM's Australian arm, Holden, puts GMDAT at the forefront of GM's global product development strategy, and means that the division is on track to meet its sales target of 1.8 million units in 2007. This will enable GMDAT to offer a competitive challenge to Kia and Hyundai going forward.

Michael Grimaldi, chief executive of General Motors Daewoo Auto & Technology (GMDAT), announced yesterday that the group is to develop a new minicar (A-segment) platform in addition to the subcompact (B-segment) platform it is currently working on. "Our team will design and develop new minicars in two to five years and this will give us the potential to grow further in the Asia-Pacific as well as more traditional markets like Europe, where minicars are popular", said Grimaldi.

The basic architecture developed by GMDAT will be utilised by other GM units to manufacture minicars, a segment that currently accounts for just 5% of the company's sales, or 200,000 units. Grimaldi noted that the new products are expected to double GM Group's minicar sales to 400,000 units.

"I believe other carmakers will also increase minicar production amid high oil prices as more consumers will choose smaller cars for fuel efficiency and affordability", Grimaldi said.

The announcement confirms GM's commitment to its South Korean arm as the division has consistently delivered projects on time and under budget. GM is to expand GMDAT's product line-up as well; the unit recently began production of the Daewoo Windstorm (Chevrolet-branded Captiva) cross-utility vehicle (CUV) that will also underpin the European Opel Antera (see South Korea: 7 June 2006:GM Daewoo Launches Captiva SUV). GMDAT will also work to expand its large sedan line-up, working in conjunction with Australia's Holden on the ZETA platform, which underpins the new Commodore and will serve as the platform for a Daewoo product to replace the Statesman, currently imported to South Korea from Australia.

In addition, GM has also invested in a recently opened 250,000-unit-per-annum (upa) diesel-engine facility in Gunsan, and is building a new test track and engineering research and development (R&D) centre in the Incheon Free Economic Zone, in South Korea.

Outlook and Implications

The news that GMDAT will be developing a replacement for the Matiz model is not a surprise in itself, but the fact that the platform will be utilised by GM Europe to target the minivehicle market in that region underlines Daewoo's growing importance in GM's global platform strategy.

GMDAT's ability to develop new platforms and products on time and under budget is held up as a model for GM's global operations, and ensures continued investment in the South Korean arm.

GMDAT exceeded global sales of 1 million vehicles in 2005, and is targeting 1.6 million units in 2006 (see South Korea: 8 June 2006:GM Daewoo Raises 2006 Sales Target to 1.6 mil. Units) and 1.8 million in 2007. GM Daewoo is looking to challenge Kia as the number-two South Korean manufacturer in its domestic market. Currently, its domestic market share stands at around 10-11%.

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