Ford pullout hits Daewoo car exports

Ford Motor Co.'s decision to give up its bid for Daewoo Motor is expected to inflict a severe blow to Daewoo Motor and its affiliated companies.

Daewoo Motor already has been directly hit in terms of its degraded credibility and hitches on its car exports, while its affiliates are faced with cash shortages and in danger of successive bankruptcy. Consequently, share prices of these enterprises dipped.

The failure in the Daewoo corporate sell-off has sent a wave of repercussions through the industrial sector and is feared to become a serious stumbling block in the real economy.

Due to the considerable delay in the Daewoo sell-off plan, domestic and export sales are in question. During August, sales volume of Daewoo automobiles totaled 56,324 units including 24,011 in domestic sales and 32,313 in exports. This volume is much smaller than that of Hyundai cars, totaling 128,759 units, and Kia's sales of 84,800.

Considering that Daewoo's car manufacturing capacity is 1,166,000 units per year, this sales performance is very poor.

A high-ranking Daewoo official has disclosed that domestic sales goals for Daewoo cars were readjusted downward with 22,000 units for September. The figure is 2,000 units fewer than that of last month, vacation season, and 37 percent down from the previous July.

Daewoo Motor, in fact, is waging a uphill competition with its rival auto makers, which are putting out new models. Noting that Ford's initial decision was to take over Daewoo Motor, its exports climbed, but the American automaker's abandonment of its bid for the takeover, its exports are destined to decrease, the official said.

In particular, Daewoo car exports to the United States recorded 47,000 units from January to August, an increase of more than 160 percent compared with the corresponding period of the previous year, but observers worry that the situation will change after the Ford pullout.