GM Daewoo to Invest $ Billions In New Car Development

SEOUL, Oct 16, 2003; Reuters reported that GM Daewoo Auto & Technology Co, South Korea's third-largest auto maker, said on Thursday it would pump in more than $1 billion by 2006 to broaden its product range and help it compete better with bigger car makers.

Unlisted GM Daewoo, which trails market leaders Hyundai Motor Co and Kia Motors Corp in South Korea, derives most revenues from mini-cars and subcompacts.

"The company is planning to develop and mass-produce large-sized luxury cars, sports utility vehicles and diesel cars over the next two or three years with an investment of more than $1 billion," GM Daewoo said in a statement.

Out of the planned investment, the auto maker will spend one trillion won ($854.4 million) in research and capacity expansion next year, the company spokesman Kim Sang-won said.

GM Daewoo said in the statement it was moving fast to compete in additional segments with the ongoing development of new cars.

South Korean car makers face a tough road at home as consumers tighten their purse strings, with the South Korean economy set to record its second-worst showing in more than two decades this year.