Standing on its Own Two Feet with Artisan Spirit

At 1:30 p.m. on October 24, your correspondent visited Daewoo Bus, Ulsan. The assembly line was filled with the noise of machines grinding metal and the blue glow of welding.

A huge metal frame was being shaped into a bus as it passed through some 500 meters of assembly line, manned with skilled workers in three stages.

After breaking away from Daewoo Motors in May 2003, Daewoo Bus was taken over by Young-an Hat Company. Notwithstanding many difficulties, Daewoo Bus has become the leading bus maker in the domestic market. On October 25, the company is releasing four brand new models in its FX series, hoping to take another major step forward in the industry.

Successful custom-made products-

The company sold a record 4,502 buses last year, becoming the market leader with 42.6 percent market share.

Until the end of September, the spin-off company sold only 3,343 buses, taking the second place with 38.1 percent market share. But the bus maker expects a jump in sales when the new lighter models, with more powerful engines and better transmissions, hit the market.

The reason why Daewoo Bus, which does not have affiliates or a passenger car division and is at a disadvantage in R&D, has achieved such a solid performance is due to its high-quality products and niche market strategy.

The average term of service for employees, whose average age is 50, is 25 years. The buses are 95 percent hand-made, so retaining skilled workers is very important in production and cost reduction. The magic touch of these skilled workers is everywhere from the buses’ structure and to painting, down to the tiniest detail and part.

Lim Sa-yeon, in charge of Ulsan plant, said, “Thanks to our artisans, we are the leader in the tailor-made bus market.”

Going beyond Korea-

Given the annual domestic bus demand of just 8,000-10,000 units, the company has made inroads into foreign markets.

Of the total 8,000-plus buses produced in the Busan and Ulsan plants annually, 40-50 percent are exported to 50 other countries. Daewoo Bus became the first bus manufacturer in Korea to export to Japan in 2005.

The company is going global in order to quickly respond to overseas markets and to avoid fluctuating exchange rates. On top of its plants in Guilin, China, and Taiwan, it has built new assembly lines in Costa Rica, in 2004, and in Shanghai, China in 2005. The company also established factories in Vietnam and Kazakhstan in 2007, bringing its total number of overseas plants to six; which boast a combined annual production capacity of 5,000.

Daewoo Bus has a dream of surpassing 1 billion dollars in sales by selling 22,000 buses annually – a sales figure similar to that of Mercedes-Benz, Scania and Volvo.

mobidic@donga.com