GM Daewoo:2006 Car Sales Up More Than 30 Percent

SEOUL January 18, 2006; Cheon Jong-woo writing for Reuters reported that GM Daewoo Automotive & Technology Co., South Korea's third-largest auto maker, aims to increase sales by around a third this year, a senior executive said on Wednesday, as it expands its range of cars to tap into an expected recovery in private spending.

General Motors Corp. the world's biggest auto maker, and partners took a majority stake in some of the assets of Daewoo Motor in 2002, creating unlisted GM Daewoo, which makes mainly sub-compact models such as the Matiz, Kalos and Lacetti.

But, as many South Korean drivers prefer larger cars, GM Daewoo is diversifying its product mix, adding sedans and sports utility vehicles (SUVs) in a bid to push up its domestic market share to 15 percent over the next few years from 9 percent now.

"We expect (2006 sales) volume to be between 1.45 million and 1.5 million (units)," Vice President Rick Labelle told reporters.

GM Daewoo, which trails Hyundai Motors Co. and its affiliate Kia Motors Corp. in South Korea, sold 1.15 million vehicles last year, mainly for export.

This year, GM Daewoo plans to launch an SUV model in the first half and a diesel-engined passenger car in the second half.

"We will continue investment to develop new models and on diesel engine production as we completed a plant for the engine and as we see strong demand," GM Daewoo President Lee Young-kook told a news conference to unveil the new Tosca sedan.

GM Daewoo aims to increase its domestic sales by half this year to around 150,000 units, Labelle said. GM Daewoo sold 107,664 units in South Korea in 2005.

The company plans to spend 1.3 trillion won ($1.3 billion) by end-2007 on developing new models and capital expenditure, Lee said.

Hyundai said last week it hoped to increase its domestic car sales by more than 10 percent this year to 630,000 units.

Hyundai Motor shares closed down 1.6 percent at 92,800 won on Wednesday and Kia Motors fell 3.2 percent to 22,800 won. Seoul's broader stock index (KSE:^KS11 - News) closed down 2.64 percent.