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Daewoo Auto Overcomes Insolvency

Posted October. 22, 2001 08:30,   


After increasing profits for a six month period from April to September, Daewoo Auto turned around its insolvency problem with the accumulated profits. Moreover, the smooth proceeding of Daewoo Auto`s transfer has given a green light for Daewoo`s future.

``We sold 45, 181 cars last month, raising sales by 400.2 billion won and we increased the profit margin to an unprecedented 14.9 billion won this month.`` Daewoo Auto announced on the 21st.

After running a large deficit until March, Daewoo improved sales from April on and made 11.3 billion won in profits. If Daewoo Auto continues to make a profit until the end of the year, it will be the first time in three years since 1998.

The parts company also maintained a balanced budget for three months from July to September. Three years since June of 1998, the company made 5.1 billion won in profits for July, 7 billion won for August, and 1.2 billion for September.

Kim Jong-Do, director of Daewoo Auto, commented, ``We are seeing the fruits of intense ad campaigns. The daily sales increased from 499 cars to 656 cars after we signed the mutual agreement.`` Daewoo Auto is expected to increase its car sales by 30 percent in the domestic market in the 4.4 quarter (October to December).

Proceedings for GM`s takeover of Daewoo Auto is also moving smoothly.

Daewoo Auto reports that GM is examining articles and provisions in the contract related to auto production and technological innovation, and has not run into any problems.