Daewoo marketed cars in the United States for only about 1,300 days, but its story was as interesting as its cars were bland. The narrative of the company’s rapid home-market growth, its ambitious efforts to sell cars globally, its offbeat plans for US sales, and its rapid departure from these shores reads like no other. Spotting this Leganza – the first Daewoo I’ve seen in years – seemed like a good opportunity to share this odd corporate story with Curbside’s readership; so let’s take a ride back to when new Daewoos roamed the earth.
If you recall Daewoo-branded vehicles at all, you probably remember the few years in the late 1990s and early 2000s when they suddenly sprouted up all of the world… before quickly disappearing without a trace. What you may not realize is that these cars were produced by one of the world’s largest companies, which risked everything in order to design and market a range of vehicles for global consumption. Much of that plan depended on successfully selling cars in the United States – the proceeds of which were to repay years of heavy investment and expansion. Of course, things didn’t work out quite as planned.
Daewoo’s early history is a remarkable account of corporate growth. Founded in South Korea as a textile company in 1967 by 31-year-old Kim Woo-choong – using a $5,000 loan – the firm quickly catapulted in size. Within two decades, Daewoo boasted $40 billion in global sales, became Korea’s second-largest chaebol (conglomerate), and produced everything from construction equipment to firearms to consumer electronics. Kim’s meteoric rise was made possible by near-constant expansions into new business lines, and by his knack for purchasing moribund businesses at bargain prices, and then turning them around. His strategy also benefited by being in the right place at the right time, for as Korea’s economy emerged from its historically isolated nature, Daewoo and its Chairman Kim were right there ready to lead the charge.
Kim Woo-choong relentlessly pursued new business lines, and saw one in particular as his company’s potential crown jewel – automobiles. Accordingly, he entered the car business in 1978, as he had with many other industries, by acquiring a stake in an insolvent company. That company, Saehan (formerly Shinjin) Motors, had produced relatively small quantities of Completely Knocked Down (CKD) Nissans and Toyotas since the early 1960s.
Toyota pulled out of this manufacturing alliance in the early 1970s – and General Motors stepped in to take its place, acquiring a 50% stake in the Korean firm. This changed the company’s CKD output to GM vehicles, such as the Chevrolet 1700 above, which was a rebadged Holden Torana. However, within a few years, the partnership went broke. In 1978, Kim Woo-choong’s Daewoo acquired the 50% of Saehan that was not owned by General Motors… and so Daewoo’s first steps into the auto business came with GM as a partner.
Daewoo-branded vehicles first emerged in the early 1980s. For the first decade, Daewoo followed its fellow Korean manufacturers of Hyundai and Kia by producing mostly small, inexpensive vehicles based on other manufacturers’ underpinnings, in this case GM. American consumers’ first introduction to Daewoos came with the 1987 Pontiac LeMans, built by Daewoo and (oddly) sold as the Daewoo LeMans in its home country, replete with Pontiac’s arrowhead badge. This LeMans didn’t create a good first impression; sales fell short of expectations, and the car developed a reputation for poor quality. Chairman Kim was convinced that Daewoo could do a better job of building cars on its own. Accordingly, in 1992, Daewoo Group (what the parent company was called) bought GM’s share of its joint venture for $200 million, and Daewoo Motor became an independent manufacturer.
During Daewoo’s boom years, Kim Woo-choong befriended the world’s business and political elite. Clockwise from top left, future US President Donald Trump, South African President Nelson Mandela, German Chancellor Helmut Kohl and Polish President Lech Walesa.
The 1990s were Daewoo Group’s glory days, and upon gaining independence from GM, Kim was determined for Daewoo Motor to become a global automotive company. And thus started the heavy investment in R&D and production capacity that eventually led to Daewoo’s US vehicles. But that didn’t come cheaply; through the 1990s, Daewoo went heavily into debt, with a strategy that depended on strong future worldwide sales to repay those obligations. This was, of course, a risky strategy, but debt and risk were nothing new to Kim Woo-choong – after all, his company’s massive growth in the 1970s was largely due to debt financing and taking risks that other investors shunned.
Daewoo’s embrace of debt financing becomes understandable when reading interviews of Kim Woo-choong, or excerpts from his book. In general, Kim embraced debt as the best way to bring about quick growth over a short period. At one point, he said “If we don’t have technology, we can buy it. If we don’t have money, we can borrow and repay it when we make it.”
Importantly, Kim wasn’t afraid of failure. Failure is a fact of life for the ambitious, and like many entrepreneurs, he was convinced of his ultimate success, even if that meant occasionally taking a financial bath. He wrote in his book: “It is too bad if you lose money, but money is one of those things that is OK to lose since you can always make more.”
Kim Woo-choong introduces the Leganza in 1997.
Of course, debt reliance is a risk that is bound to collapse if continued indefinitely – a fact that eventually brought about the end of Mr. Kim’s empire. By the time our featured Leganza was built, Daewoo Group was $80 billion in debt, much of it related to expanding its automobile business. Later in life, Kim confessed that “My big mistake was being too ambitious, especially in autos.”
Ambitious, he certainly was. Kim planned a two-pronged approach to global car development. First, he prioritized producing and selling cars in emerging markets and post-communist states, where dominance of local car markets was largely up for grabs. Second, he planned to design a new range of vehicles for western Europe and North America. This all required investing billions of dollars, constructing a dozen factories, and coordinating two technical centers (one in Korea, the other in England) to design several new cars, from scratch, at once.
Initial results were encouraging, as cars like the Tico above became popular in some markets. But to pay back its debt, Daewoo needed to go big – specifically, big sales of bigger, more profitable cars in the world’s biggest auto market… the United States.
Daewoo initially planned a Fall 1997 US launch, but… that’s exactly when the company began to unravel. The US launch was delayed for a year, and in the meantime, the entire Daewoo Group attempted to stare down doom. Furthermore, South Korea’s national economy was in danger of collapsing due to the spreading Asian Financial Crisis. Many corporations became unable to repay creditors. This, in turn led to a lack of confidence in the Korean economy, which brought about slower growth… which led to more loan defaults. Some big companies were quickly raked into this mess: Kia Motors, for instance, declared bankruptcy in 1998, and during that year South Korea’s entire auto industry was operating at just 40% capacity.
From the Financial Crisis’s outset, it was clear that Daewoo’s position was precarious, resulting from the years of heavy borrowing to develop new car lines. Cracks soon emerged in Chairman Kim’s business plan to repay that borrowed money with profits from vastly increased global sales. The financial crisis squelched demand for new cars throughout Asia, upon which Daewoo relied. Without strong domestic and other Asian sales, Daewoo found itself sitting on a huge production capacity, but with few buyers. The company couldn’t pay interest on its loans, and the entire conglomerate collapsed with astonishing speed.
Daewoo’s Seoul headquarters lit up to spell “Leganza” upon that car’s 1997 launch.
And it was under these stormy skies that Daewoo first appeared in the US market… certainly not the best of timing, but Daewoo had no choice. US sales comprised the linchpin of Daewoo’s plan to return to profitability and repay debts – without high-margin US cars, the company had no hope whatsoever. So Daewoo gave it a good college try. Literally.
There is no easy, or cheap, way to introduce a car brand to a nation of 280 million people. Daewoo needed to stand out in the crowd – a tough task because its offerings of compact to midsize sedans fell squarely in the most crowded part of the US car market. And much to Daewoo’s chagrin, Korean cars didn’t have a stellar reputation in the US at that time.
So Daewoo executives set about doing things differently – very differently – in order to get noticed. Upon Daewoo’s September 1998 US launch, the company’s marketing strategy eschewed traditional advertising and dealership infrastructure as much as possible, and instead attempted to infiltrate the market via building buzz among trendsetting college students. It was hoped that this would serve as a back-door into US popularity. Of course, it didn’t quite work out that way, but it sure makes for an interesting story.
Daewoo of Columbus was one of the original, factory-owned dealers.
First off, Daewoo planned on operating mostly factory-owned dealerships, to save on distribution costs and realize lower costs for consumers. This setup was common in Korea, and had also been used by Daewoo with some success in Great Britain (where it had operated since 1995). However, many US states forbade manufacturers from selling directly to customers, or allowed it only with certain restrictions. Daewoo initially planned to concentrate on those states last, and to use franchised dealers only where required by law. Unfortunately, this strategy became at odds with Daewoo’s burning need for a quick expansion, and was quickly abandoned in favor of traditional dealerships.
A bit of wishful thinking. This bag is from the UK, where Daewoos were relatively popular for a few years.
Aside from factory dealerships, Daewoo also considered some other unusual tactics, but most were never put into practice – again because of the growing urgency of just making sales. For example, the company explored the possibility of direct Internet sales, which would certainly have been eye-opening in the 1990s. They also considered leasing space in retail stores such as Kmart or Walmart for sales operations, and partnering with national repair chains such as Pep Boys or Penske Auto Centers for service (Penske did partner with Daewoo briefly). Daewoo’s initial plan envisioned an unconventional dealership experience, with no-haggle pricing, and sales staff who handled both the financing and sales aspects of each transaction. But in the rush to open a huge number of dealerships in a short timeframe, those goals were abandoned. Daewoo dealers ended up being rather conventional affairs.
However, the most unusual aspect of Daewoo’s early US marketing strategy was on whom it focused: College students… as promoters, sales personnel and customers. What could possibly go wrong? Plenty, obviously, and this plan’s details sounded like a sophomore-year term paper rather than a strategy by one of the world’s largest companies to sell durable goods in the world’s largest consumer market. But… this really happened.
Ad from a college newspaper to recruit Campus Advisors
The idea went like this: Daewoo hired students as “campus advisors,” who, provided with loaner cars, were to promote those cars to their fellow students, friends and family. As independent contractors, campus advisors were remunerated in two ways: by commissions of up to $500 on each sale, and by generous discounts on their own purchase of a new Daewoo. These students didn’t actually conduct the sales transaction – rather they promoted Daewoo cars, and directed customers to nearby dealerships, where financial components of each sale (and the actual delivery) would take place, overseen by a small core of professional sales staff.
Why on earth would Daewoo do this? To stand out in the crowd – affordably. Kim Woo-choong explained the rationale shortly before sales began: “We cannot compete with other manufacturers who are selling big units, with bigger advertising and promotion budgets. It is better to go for some special segment.” The reasoning here was that college students were more likely than the general population to be early adopters and buy a little-known foreign car brand… therefore, marketing to this “special segment” would (hopefully) create enthusiasm among a demographic group known for being originators of many trends. Daewoo eventually hired several thousand campus advisors nationwide.
There were, of course, more than a few flaws in this logic. For example, Daewoo paid to fly each advisor to Seoul for training and factory tours, but after those students graduated, all of that training would be lost. Also, aside from the commission, this business model did little to reward the dedication needed to promote a new consumer brand (advisors were expected to work 8-10 hours per week doing things like handing out flyers and hosting test-drive events, but there was little accountability). Many campus advisors undoubtedly used the position as a resume-booster, and an opportunity to get a free loaner car for a few months. Lastly, the concept of peer-marketing may work for small-ticket items, but few students would soak up a classmate’s sales spiel enough to actually buy a $12,000 car.
Daewoo ad marketed to college students
In addition to on-campus activities, Daewoo’s early US effort also strove for a wider “guerilla marketing” aspect, with grassroots-type promotions aimed at young, hip and trend-setting people. For example, in several cities, Daewoo gave away cars for one year via radio station promotions, tried to drum up business at places like record stores and pizza shops, and for a brief time, partnered with performance venues to display cars at concerts of carefully selected bands such as the Beastie Boys and Pearl Jam.
College advisors and guerilla marketing were intended to provide Daewoo cheap, hip buzz to make the brand succeed. But within a few months it became clear that this innovative sales strategy wasn’t working. Daewoo needed more dealers, professional sales staff, and traditional marketing… and needed them quickly. By mid-1999, Daewoo’s US strategy shifted by 180 degrees.
Daewoo plunged into doing the opposite of its initial strategy – and plunged with all the vim and vigor characteristic of Kim Woo-choong’s frenetic business ethos.
Ads like this tried to recruit new dealers. Daewoo was bankrupt 18 months after this ad ran.
Realizing the need to vastly expand its dealer network, Daewoo Motor America provided massive incentives to prospective dealers – scrapping the traditional franchise fee, and paying for what would ordinarily be significant franchisee costs such as signage and showroom fixtures. The idea was to make it remarkably easy and cheap for existing multi-line dealers to add a Daewoo franchise. Daewoo planned to expand to 500 franchised dealers within two years – a goal, remarkably, that it achieved.
Furthermore, Daewoo scrapped its guerilla marketing tactics – in 2000 the company (which initially sought to minimize mainstream print and TV ads) spent $40 million on US marketing. The very conventional ad above doesn’t seem like it was made for the same company whose marketing director said, just a few months earlier, “we have to do something completely different.”
Daewoo’s US employees must have felt whiplashed: First, their company tried to be the country’s hippest, most unorthodox carmaker… then suddenly it was just the opposite: Let’s open 500 dealerships and flood the airwaves and magazines with ads! So goes the products of desperation. And Daewoo certainly became desperate.
During their launch, Daewoo Motor America officials predicted 15-30,000 cars in the first year of US sales, and 100,000 annually within three years. They tried for this by offering three models – the subcompact Lanos, the slightly larger Nubira, and our featured car, the midsize Leganza, which debuted with prices between $16,000 and $20,000. More than just a flagship for a fledgling lineup, the Leganza was the car on which Daewoo pinned its hopes.
Mid-sized cars like the Leganza generated more profit for carmakers than did subcompacts, so Daewoo hoped to concentrate on that market segment, both to bring home much-needed cash, and also as part of a marketing strategy that sought to avoid being typecast as a cheap car of last resort. With so much having ridden on the Leganza, it’s worthwhile to take a closer look at the 2001 example that serves as our featured car.
If the Leganza looks European, that’s no illusion. Giorgetto Giugiaro’s Italdesign created it, based on that firm’s 1990 Jaguar Kensington prototype. While not the most distinctive design, the overall car sported the conservative and mildly generic look popular among mid-size sedans of its era. Seemingly at odds with the unconventional early US marketing efforts, Leganza wasn’t intended to stand out from the crowd – just the opposite: Daewoo wished to jump right into this popular market segment with a car that looked and drove like it belonged there. Everything about this car was designed to represent the nice side of average.
This Canadian Daewoo ad has the catchy “Daewoo That’s Who” slogan, that was never used in the US.
Power was delivered to the front wheels by a 2.2-liter, 16V 4-cylinder engine producing 131 hp and 148 lb-ft of torque – measurements all within a hair of both Accord and Camry standard engines (6-cyl. engines weren’t yet considered obligatory for this class). This engine reveals some of Daewoo’s development philosophy: in order to develop its range of new cars within a few years, Daewoo outsourced some componentry, in this case, the engine was sourced from General Motors’ Holden division.
Leganzas were offered in three trim ranges, starting with our featured car, which is a “base” SE. For a base model, this was well-equipped for the times, coming with air conditioning, power windows and locks, a cassette player, heated mirrors, etc. In regards to equipment, the Leganza SE was more equivalent to mid-level variants of its competition, as the base Accord DX and Camry CE came without these features. A long list of equipment and a low price were Leganza’s selling points… in 2000 (midway through the Leganza’s three-year run), a 5-spd. SE listed for $13,660… or $14,460 for an automatic. That’s about $4,000 less than a comparably equipped Accord LX. Higher-trim Leganzas piled on the luxury even more, with only modest price premiums, further increasing the Daewoo’s relative value over its competition.
For only about $2,000 more than the SE, one could spring for an SX, which added ABS brakes, leather upholstery, a CD player and other goodies. Another $2,000 on top of that would get a top-line CDX that went full-luxury by adding items such as automatic climate control, a sunroof, power driver’s seat and “simulated woodgrain appointments” on the interior. With a fully-equipped CDX listing for around $18,000, Leganzas undercut equivalent Accords, Camrys or 626s by about $7,000 (and that’s before discounts, which were substantial).
This brochure image shows the CDX’s dashboard. Aside from the world’s most generic steering wheel, this was a nice place to be – well-presented controls and good quality materials. Imagine this view but without the plastiwood trim and with a few more blank controls, and one can envision our featured SE’s dash.
Overall, the interior matched others in its class in terms of both size and materials. Like the rest of the Leganza, there was nothing distinctive here, but quality beige conservatism sold in this market segment in the late 1990s, and from that perspective, Leganza delivered the goods.
On paper, Leganza seemed competitive, and undercut the mid-size sedan class leaders like Accord. In reality, it was indeed pretty good, though not quite as refined as much of the competition. Reviewers noted road noise, engine noise and jittery handling more reminiscent of previous decades, but plenty of buyers would gladly sacrifice some subtle refinement for a good-looking and decently-built car that cost thousands less than the competition.
Source of sales figures: www.carsalesbase.com
For its first two years, Daewoo did remarkably well for a new firm, especially given its circumstances. In 2000, sales increased rapidly, so Daewoo could legitimately claim to be America’s fastest-growing nameplate. However, in 2001 sales fell by over a quarter, and then plunged 60% more for 2002. Among other things, Daewoo was battling adjectives… many articles and reviews about their cars prefaced Daewoo’s name with terms like troubled or ailing, due to the company’s financial woes. From a potential customer’s standpoint, this wasn’t exactly a confidence-booster for one of life’s biggest purchases.
Ultimately, Daewoo sold about 170,000 cars in the US – about a third of them (59,000) being Leganzas. It’s easy to see how, for certain buyers, Leganzas held appeal versus Accords or Camrys. Of course, one could be reasonably sure that Honda or Toyota would be around before the car’s warranty period expired… which didn’t happen with Daewoo.
When our featured Leganza was built, Daewoo Group was the world’s 18th largest company, but was $80 billion in debt. Much of this was attributable to the chaebol’s auto subsidiary, Daewoo Motor Company, which was saddled with the toxic combination of unfulfilled hopes, excess capacity, and lots of bills coming due. The knockout punch came with the quick-spreading financial crisis, which hit Korea particularly hard and left many of its companies on unstable footing.
When Daewoo entered the US market in 1998, the chances were good that Kim Woo-choong himself knew the company was in peril. Early that year, Kim asked GM to buy back into Daewoo Motor, but GM declined. In fact, the US sales venture may well have silently morphed into a tactic to extract a higher bid from an eventual corporate benefactor, with Daewoo able to point to strong sales in the world’s biggest car market.
In April 1999 Kim Woo-choong announced a restructuring plan for the entire Daewoo Group. But at that time, he didn’t publicly express alarm over his company’s future – that very week he met Queen Elizabeth II during her state visit to Korea and proudly showed Her Majesty Daewoo’s Seoul design center. However, the chaebol’s financial condition only worsened, and dogged by pending catastrophe and allegations that he knowingly concealed his company’s problems, Kim fled Korea later that year (he eventually returned, was convicted of accounting fraud and embezzlement, and sentenced to 10 years in prison). From then on, it became clear that Daewoo Group as a whole was failing.
What followed – roughly paralleling Daewoo’s time in the US market – was three years of a once-great company flopping around, trying desperately to stave off death. In late 1999, the Korean government assumed the role of overseer to Daewoo’s operations… and essentially chose GM to take over Daewoo Motor. However, Ford, DaimlerChrysler and Hyundai all announced that they too were interested in purchasing Daewoo’s automotive business, so seeing multiple suitors, the government decided to auction the company instead.
Source: Detroit Free Press, May 14, 2000
One might reasonably ask: What was the appeal of buying this debt-ridden car company? The attraction lay in Daewoo’s vast manufacturing and sales network, and its strong presence in parts of Asia, which other manufacturers hoped to build upon, speculating that growth in Asia’s car market in the new millennium would be very strong.
Ford outbid its rivals in a June 2000 auction, but it wasn’t an auction for ownership of Daewoo Motor, but rather for the rights to negotiate such a deal. However, those negotiations abruptly failed three months later – Ford simply walked away from the deal, possibly after getting a hint that Daewoo was more debt-burdened than originally thought, but also maybe resulting from Ford’s Firestone tire recall and its affiliated costs. This was strictly bad news for Korea. By that time, Daewoo Motor was insolvent, and it’s not exactly easy to find a suitable buyer for a bankrupt car company. All of this led Daewoo back to the company from which it had split just eight years before. Somewhat remarkably, GM expressed interest.
This corporate courtship produced results in October 2000 when GM submitted a letter of intent to acquire Daewoo Motor Co. But from there, it still took a year and a half to reach a final agreement. The main complicating factor was that Daewoo Motor’s debt was almost inseparable from the debt of its parent company’s other subsidiaries, which became an accounting quagmire. Of course, both negotiating parties had differing views on this topic: GM wanted to reduce its own debt assumption as much as possible, while the Korean Development Bank, the state-run entity that handled the auction, wanted just the opposite.
During the long period of negotiations that followed, Daewoo’s financial prognosis only worsened, and creditors worried that if GM backed away like Ford had, all hope of achieving a decent deal for Daewoo would be gone.
GM presented a formal offer for Daewoo in May 2001. But that still wasn’t the end. Another sticking point emerged regarding Daewoo’s aging Incheon factory: GM didn’t want it, but the Korean government insisted that it be included in the deal. Uncertainty regarding this led to labor unrest, and riots among employees who feared being laid off. This delayed the deal by several more months.
From left, Daewoo Motor Chairman Lee Jong-dae, Korea Development Bank President Jung Keun-yong, and GM Chairman John F. “Jack” Smith, Jr. shake hands after finalizing the deal.
Finally, the GM/Daewoo deal was ironed out in April 2002: GM paid $1.7 billion in cash and preferred stock for control of the new company, to be called GM-Daewoo Motor (later changed to GM Korea). The troublesome Incheon plant remained controlled by Daewoo’s creditors… GM leased it back and produced cars there, and did actually acquire it years later. In exchange for the Incheon compromise, and a Korean concession to shield GM from any hidden debt, GM agreed to no layoffs, which eased labor problems.
Interestingly, through a torturous negotiation process, GM drove an excellent deal. By playing the waiting game, GM negotiated a good price, shielded itself from hidden debts, and was able to pick and choose which foreign subsidiaries and production facilities to include in the deal.
And one other item… GM’s deal did not include Daewoo’s American dealer network. GM elected to dismantle the US operations (much to the exasperation of those 500 dealers), rather than to pour money into what was effectively competition for GM brands. Daewoo Motor America filed for bankruptcy in July 2002. US Daewoos sold during this period when the GM sale was pending were heavily discounted, but customers bought isntant orphans, and no one knew how much support GM would provide to existing Daewoo customers or dealers (turns out it was absolutely no support whatsoever… buyer beware).
Overall, GM’s Daewoo acquisition was a shrewd move. The deal helped GM penetrate the sizable Korean domestic market, and also enabled GM to use Daewoo’s relatively well-regarded line of cars as offerings in emerging markets. GM turned the vast majority of Korean Daewoo production into exports. Within four years, GM-Daewoo was producing over 1 million cars for 150 countries… and became the key of GM’s early efforts to become a strong player in China. While the Daewoo nameplate quickly disappeared from most of the world, many Daewoo models were rebranded as Chevrolets. Ten years after the deal closed, one-quarter of all Chevrolets sold worldwide were built in Korea, and were essentially Daewoos. And even though GM Korea’s worldwide role is now somewhat uncertain (GM has withdrawn Chevrolet from many markets where the company’s Korean-built cars were sold) the Daewoo acquisition still ranks as a net positive for GM’s long-term operations.
South Korean President Lee Myung-bak and US President Barack Obama tour GM’s Orion Assembly plant in 2011. The Chevy Sonics built at Orion were developed in part by GM Korea.
Ironically, for American consumers, Daewoo proved more successful in death than in life. As soon as the ink dried on the Daewoo deal, GM announced that it would sell Daewoo’s Kalos model in the US as the Chevy Aveo. Other models followed, such as the Spark and Sonic, as well as many rebranded Suzukis.
Later GM Korea cars became even more common sights on American roads – for example, the Chevrolet Cruze and Buick Encore. In its best year of 2014, Americans bought about three times more Cruzes than they did of all Daewoos during the brand’s three-year US experience.
With each passing day, the Daewoo name fades further from people’s memories. However, few business stories can quite match Daewoo’s US experience. Its 1,300 days in the US market was full of high hopes, unrealistic expectations, bizarre strategies, impending doom… and cars that are now barely remembered. So, if anyone asks “Who had the strangest experience selling cars in the US?”… the answer is likely “Daewoo, that’s who.”
2001 Leganza photographed in Paris, Missouri in June 2020.
Related Reading:
Junkyard Classic: 2001 Daewoo Leganza CDX – Battling Uphill All The Way Jim Klein
CC Capsule Review: 2000 Daewoo Leganza – Will’s First Car Paul N (review of his son’s Leganza)
Curbside Capsule: Daewoo Nubira – A Family COAL William Stopford
I always thought Daewoo could have used a different and better sounding name if it wanted success in the USA.
Interesting that here in the UK they insisted that the name was pronounced ‘Day-you’ yet the US ad says “Day-woo”. Maybe I was right all along.
If your survey was drawn from a swipe stake you could have the use of a car for a whole year whilst you reported on the car.,
First manufacturer to include 3 years servicing,in the UK, with the warranty. hailed as the new, non haggle way of buying a new car. After 3 years the market was flooded with them when owners woke up to the fact they were just 1980s Opels with poor materials.
Now they build all the small Chevy’s and Buicks. Remember when people laughed at Hyundai and Datsuns?.
Daewoo, Daewoo, my car is breaking and I want to go home!
That’s the case for most of the Asian automakers in the UK versus the US. The brands either cultivate different pronunciations, or they develop naturally.
In the UK, Mazda is said with a longer A, like “Mahz-duh” (as in “map”) versus our “Moz-duh” (as in “monster”).
Our “Knee-sahn” is their “Niss-ann” (as in “nicotine.”)
We say “Hun-day” (rhymes with “sundae”). They say “Hi-on-die”.
They seem to pronounce our “Mit-su-bee-shee” as “Mit-su-bi-shi” (with the third syllable sounding like the bi- in “bit”).
For certain dialects in the south of England and parts of Scotland and Wales, you might catch an intrusive R, wherein “Honda” and “Toyota” become “Hon-dur” and “Toy-oh-tur”, depending on which words follow them.
And of course, they pronounce our Pree-us as Pry-us (like pious, with an R added).
I still remember their tag-line in British ads – ‘that’ll be the Daewoo’ – truly woeful !
I also remember my shock when I realised they were selling an obsolete Opel Kadett in the USA badged as a Pontiac LeMans !
At the time it was launched, and for most of its’ run it was the current Kadett.
When I was an exchange student in Missouri my best friend drove a LeMans. It was the replacement to his cavalier. We did have some very good times with the LeMans. Just that name instead of Kadett made it like 30 percent quicker …
The LeMans though was a Kadett/Astra that was built poorly in Korea. Nowhere as good as the European built model.
Thanks for putting together the fascinating analysis into Daewoo! I had no idea how massive the debt Daewoo had accumulated. Really eye-opening…
About rebranding the Daewoo cars as Chevrolet, the idea came from the Israeli importer and distributor. Chevrolet brand was more familiar to the Israelis and carried more “storied history” than Daewoo. General Motors agreed to test the idea, and the sales increased so much in Israel. Thus, quick rebranding of Daewoo cars as Chevrolet in many markets, including Europe.
However, that idea caused a lot of headache for General Motors in Europe, especially that many of Opel and Chevrolet-branded Daewoo cars overlapped each other. I guess General Motors never learnt its lesson about “oversaturating” the European market for its North American cars during the 1980s and early 1990s, selling each brand (except GMC) without careful or effective marketing and proper targeting.
Thus, the breathtaking implosion of European sales for General Motors vehicles, including Daewoo and Chevrolet. Opel barely survived and was sold to Peugeot for pittance. Ironically, Opel thrived under new ownership and turned profit.
CC effect?
There is currently a Leganza for sale on Craigslist in St. Augustine, a twin to the one in the first picture. Asking price? $2,000. Seller claims that the price is based on KBB valuation. I am surprised KBB gives any Daewoo a value, does this mean they list Yugos, too?
$2000?? Good luck with that. My son picked one up for $500 ten years ago.
I just had to look that one up. Turns out it’s not even a Leganza, but a Nubira! Granted, it seems in mighty good shape, and is very clean. Just seems a few thousand dollars too much. Maybe the seller is using a 15-year-old KBB?
I used to drive by the Daewoo of Columbus Morse Road dealership several times a week. The site became an Enterprise Rent-A-Car lot, which I believe is still in operation.
Thanks for this great piece of modern archeology. I saw a Daewoo in traffic recently and wondered how long it had been since seeing one before that.
I would not have guessed that a well-known design house penned these cars – they seemed so bland and the grille looked both generic and unattractive. But they seemed fairly popular around Indianapolis at the time.
That one-year delay in coming to the US was costly for another reason – by 2001 the US economy was in a recession. In that kind of economy the buyers most likely to choose a car like Daewoo are the ones least likely to buy a new car at all. One more strong sales year before 2001 might have made at least some difference, but then again, perhaps nothing would have helped given the big picture.
Regarding “modern archeology,” it is somewhat amusing that cars from the 2000s are now old enough to qualify as artifacts. Eek!
I think that one-year delay was mighty costly, because I think a lot of buyers shunned Daewoo due to the company being bankrupt… I’m not sure it would have ultimately made a difference, given Daewoo’s massive financial hole, but I suspect that Daewoo would have attained 100,000 annual US units had they actually been able to get started in ’97 as opposed to ’98.
“In that kind of economy the buyers most likely to choose a car like Daewoo are the ones least likely to buy a new car at all.”
I dunno – those without money did seem to have other choices in 2001, beyond Daewoo. About this time, Mitsubishi was offering its infamous “triple zero” new car financing: no money down, no interest, and no payments until 2003. What could possibly go wrong?
I had forgotten about Mitsu, but you are right. However, Mitsubishi was a known quantity (and Japanese) in 2001-02 while Daewoo was from the same country that sent us the Hyundais that had gotten such a bad rep here. In my experience, people get pretty conservative with their money in a bad economy and if the Japanese car and the Korean car came with similar prices/terms, I think we would agree where the money would flow.
Well, that’s a tangled corporate history! The most I’ve thought of Daewoo (other than in terms of being a “branch” of GM) was to feel sorry for those who bought those cars and quickly had no dealer to service them. Some family friends had a Lanos, and although I don’t remember their having any complaints about it, I do remember being concerned about parts availability into the future. I didn’t ask about it, because they were just happy to have a newer car.
I got a chuckle out of Kim’s book – “Sucess Secrets” – oops. When you’re paving your streets with gold, there’s nothing left over for an editor, I guess. 🙂
Nice job, Eric. This must have taken some time to put together.
Thanks Aaron! Yes, this took quite a long time to put it together… I started just writing about the Campus Advisors program, but it sort of grew and grew. Sort of like Daewoo’s bankruptcy proceedings, it just went on forever. Glad you liked it.
From what I found, parts availability was a big problem in 2002-03, because (as I understand it), Daewoo was hoping GM would take over parts & warranty work. GM wanted nothing to do with that… however they did include a clause in their final agreement that GM-Daewoo would ship parts to the US for the non-dealer parts market. But there was a gap of several months when certain parts were essentially unavailable. Since then, folks have been able to keep Daewoos on the road, though I’m sure that’s not getting any easier.
I can’t believe I hadn’t noticed the “Sucess” typo on the book’s cover! That book cover is actually from an Indian edition of Every Street is Paved with Gold (it was sold worldwide and translated into many languages). I think the American versions had a different dust jacket, and “success” was spelled correctly.
Great write-up, Eric. Really nicely done. I remember the fanfare for when Daewoo was coming to the US, and the goofy college marketing ploy. Really they weren’t bad-looking cars, but had no advantage and an unproven name against the competition, especially in the already saturated compact and midsize sedan markets.
The Leganza and especially the Nubira are largely forgotten. There was even a 5-door hatchback version of the Nubira available in the beginning. I only ever saw one of those once; now that would be a find now.
However, it was the Lanos that seemed to have the most pop culture infamy, at least in “Pineapple Express” and with the “Mad TV” character, Tank.
I have a funny story with the Lanos. My brother’s ex wife was born to American expats and raised in Panama, so my whole family went down there years ago for their wedding. At the time, my brother’s father-in-law drove a Lanos hatchback, and one evening he was picking us up from our hotel in it. He had driven the wrong way into the hotel entry vestibule, so all these taxis were now blocked coming the other way, so he had to turn around. He proceeded to attempt an Austin Powers-style 72-point turn, and really the little Daewoo could’ve done it in just a few maneuvers, but he just couldn’t pull it off (was leaving too much space before stopping to change direction). So a line of several taxis had to back up to allow the gringos in the Daewoo to drive the wrong way out of the vestibule. That’s my Daewoo memory!
I like your Daewoo memory — not every has a Funny Daewoo Story, so thanks for sharing this one!
And I don’t ever remember seeing a Nubira wagon; I’d actually forgotten about them until I started researching for this article.
I was surprised to see that Daewoo sold cars in Canada. I can’t recall ever seeing one, but maybe they were just so generic I never noticed. They should have been sold in the no name section of stores, in a box that simply says “COMPACT HATCHBACK” or “MIDSIZE SEDAN”
What we do have here is the Chevrolet Epica, which was actually a Daewoo. Never been in one, but the way they looked after a few years did not inspire confidence.
Interesting story, if Kim had kept his companies more separate instead of a giant conglomerate that would have helped stave off total collapse, but I guess that’s not the most aggressive way to grow.
I never was able to find information on Canadian sales, which I expect was rather small. Ironically, Daewoo’s Canadian distributor seemed to have its act together more than the American outfit. For some odd reason (and this was too much detail to put into the article), Daewoo initially separated the US into four marketing regions, which were to act basically independently… with their own advertising strategies, sales promotions, etc. As a result, the early Daewoo US marketing materials looked rather amateurish… the Canadian materials that I’ve found looked better to me. Didn’t seem to help much, though.
Incidentally, I believe this is a Canadian-market Leganza commercial… probably too risqué for US tastes at the time.
I had bought a Daewoo window air conditioner that I mounted through the wall of the living room. It lasted quite a number of years.
One chapter that was left out was the rebadging of Daewoo cars as Suzuki in the US as an intermediate step since GM had already developed the Cobalt and HHR for Chevrolet. It basically killed off Suzuki Auto in America.
In the mid-00s my supervisor at work had a Nubira and a poor opinion of it; too many problems for a car she was still making payments on, and parts were already starting to be hard to find. She ended up rolling the debt onto a new Corolla in ’05 or ’06 shortly before taking a promotion to another location; when I next saw her in a parking lot a decade later she was still driving the long-since-paid-off Toyota.
Also missing was the Ssangyong saga. The sinking Daewoo took over failed Ssangyong in 1997 at low low prices, binned the Ssangyong brand basically globally and integrated their dealer network and model lineup into Daewoo almost immediately in 1998, then by late 2000 was undoing all this and selling them off to lighten the load for the impending attempted deals. That image in the article of the Queen visiting clearly shows early models and sketches for what eventually launched as the Ssangyong Rexton (she’d been shuttled around Korea in a newly rebadged Daewoo Chairman if I remember). I remember as a kid seeing mid-90s Ssangyong Musso around at the time and wondering what the hell that badge and name was on what I knew from magazines as the Daewoo Musso. It had been popular with farmers in the area I’m from, beaten only by the beloved Daihatsu Fourtrak and Mitsubishi L200.
Also, in South Korea come March 2011, the Daewoo brand was scrapped and replaced by Chevrolet (only a few Central Asian and Eastern European markets kept Daewoo for a few more years), with leftover orphan products like the Damas and Labo mini vans and trucks going brandless. Since that happened, sales have steadily fallen. Due to models being designed/sized/specced generally for export, they didn’t suit the Korean vehicle taxation structure and market demands well either so the lineup is now an odd assembly of models with big gaps in the range.
Daewoo was also unintentionally the backbone of GM’s Chinese operations. Engines and platforms from Daewoo form the basis of the car lineup at SAIC-GM-Wuling, first with the Chevy Spark and then the Baojun lineup, which is now GM’s source for small crossovers and such for developing markets (the role Daewoo once filled). The Matiz/Spark was also notoriously copied by Chery as the original QQ and is most of the reason they survived the rapid expansion of the CDM and could built up to what they are now.
I always liked the little wagon. For a long time there were several I would see around central CT but the last time I saw one was probably almost 10 years ago.
Thanks for the great story! I still see Leganzas around from time to time, I did not know there were so few sold. They must be pretty tough over the long haul.
I had a GM Daewoo-built Chevy Aveo briefly about 15 years ago…..part of an estate I was put in charge of. No one bought it at the estate sale, so I took it home until I found a buyer. It was actually a pretty decent little sedan. It was near new and had 10,000 miles when I spent some time with it. Around town, it was kind of fun, small and zippy. Highway driving was a chore though……bouncy, loud, and strained. And the gas mileage wasn’t even that great to make up for it.
But the young lady who bought it (my secretary’s daughter) STILL has it. And despite sitting outside, and getting very little care, the paint still shines.
Wow, that’s a deep dive into a company that stirs up few emotions, nice job. For how few were sold, there are still some around, the junkyards get a steady trickle of each of them so they couldn’t have been that bad. It’s easy to keep a new Lincoln stored in a barn for forty years if you can afford it in the first place, it’s a very different story to keep the car at the bottom of the market barrel without manufacturer support going in any condition whatsoever for twenty years. I finally gained a bit of grudging respect for them a few years ago due to this and believe the Koreans in general turned the corner on quality quite a few years earlier than commonly presumed. Perceptions take a while to catch up.
Very true… and I’m pleasantly surprised that folks seem to have enjoyed this article – I had no idea what to expect as far as feedback, since Daewoo doesn’t exactly have a big fanbase out there!
The story is interesting even if the cars weren’t!
My mom briefly had a Lanos about 15 years ago. It was an automatic with a laughable power button on the shifter; presumably it just took the car out of overdrive and held gears longer. I drove it a few times and it was goofy enough to be entertaining. The badge always reminded me of a uterus. I remember her remarking that the fuel mileage was pretty good compared to the Astro she’d come out of.
A Korean car sitting just off I-15 in downtown Paris. You’ve covered three continents without even trying! 🙂
This was enlightening. All I had previously known was Daewoo simply failed to ignite the marketplace and the brand went away. It’s trajectory is much more interestingly complex.
Eric, thanks for this. It had to be tremendous effort to put all of this together.
Yes, Paris, MO doesn’t rank in the top 10,000 places where one would expect to see a Daewoo. And I saw this Leganza around town in November as well, so it’s apparently driven regularly.
What a great job of telling the Daewoo story. Thank you very much!
Quite the story, and well told.
I see some foreshadowing of Tesla’s marketing strategy in Daewoo’s original plan to eschew dealers and media, and rely on influencers. Sounds like Tesla to me. But Daewoo was just a bit too far ahead of the times; social media hadn’t yet blossomed.
I had some direct experience with a Leganza that my younger son picked up for $500 as his first car, almost ten years ago. I drove it and reviewed it (link at end of Eric’s article). I was pretty impressed in terms of its solidity and capability. Made a good, cheap beater. He could have had it for probably quite while, but that’s not how he operated.
I really wonder if Daewoo’s unconventional dealership arrangement would have succeeded if Daewoo were able to stick with it (rather than giving up on the innovative ideas after just a few months).
At the time, I bet much of it sounded vaguely reminiscent of Saturn (no-haggle pricing, low sales pressure, etc.). But some of their original plans, like direct-selling, seemed like the kind of innovation that folks could get behind, given the right circumstances.
In the UK they were marketed as a complete mobility package .After 3 years once the warranty and inclusive servicing ran out they became almost worthless as no body wanted a cheaply made Opel cast off.Proton beat them to it in the late eighties with the same package but the cars were Colts with a different badge.Good cars .Good enough for rural cab drivers.
Thanks for this fascinating history. With almost 200K cars sold here in the US, it’s not surprising that I still see a few around, still on the road. And, somewhat correctly as it is described here, I still think of Cruzes, Sparks etc as being rebadged Daewoo’s. And didn’t Ford also try the college student “influencer” approach with the Fiesta when it was (re)launched here in the States? Not sure that was any more successful …
Ford Fiesta Movement http://www.bu.edu/goglobal/a/goglobal_courses/tm648/spain/fordfiesta_vmc.pdf
Thanks for the backstory, the Daewoo name was noticeable even in the Midwest, I didn’t know why it fizzled so fast.
For their efforts at unique marketing, it was certainly traditional here, too traditional. In our metro of under a million, Dan Nelson Daewoo was on the wrong side of the tracks – river actually, on a street best known for its strip bars!
Dan would holler at us on radio and television that “I’ve got your Daewoo!” As it turns out, few people claimed theirs.
My other experience with Daewoo is that I’m one of the few that actually ever took the wheel of one, thanks to another traditional sales channel – in 1999 the car rental yard I visited at Denver International was chock full of them.
I’m not sure which model it was – did it make a difference? But like Paul notes, it seemed plenty competent. It did what it was supposed to do, and took me through mountainous high altitude driving without a hitch.
The one commercial I vaguely recall was one where they went to Cliche Mountain and did some sweeping pan shots of whatever model they were flogging. I want to say the model was the Nubira, but I could be incorrect.
That happened here, too. Daewoo chose to park their dealership right on the street that has had more than a few episodes of Cops made there. The sign is still on the building the last time I was there.
Always in the market for a new and different subcompact, I drove a Lanos with a 5 speed and recall that I like the handling and that it seemed decently assembled. The plastics seemed Tonkaesque but nothing rattled. I was getting divorced and by the time things settled down, the writing was on the wall for Daewoo and I bought a Chevy Tracker instead. It did put in my mind that perhaps Korean cars were better made than I’d heard, so I can thank Daewoo for having owned an Accent and my current Cruze.
GM would have been far smarter to have provided support and offered current Daewoo owners a trade-in incentive. I imagine being stuck with an orphan yet knowing GM bought the company turned quite a few satisfied buyers away.
Am I right in remembering that Daewoos were sold in Halfords branches when they were first launched in the UK? Poor quality Astra and Cavalier based clones but sold with a massive warranty.
Yes… when Daewoo US considered selling cars through Walmart, they had in mind the Halfords arrangement in the UK.
Daewoo had first contracted with Halfords for service and warranty work (similar to how they contracted with Penske Auto Centers in the US), and after a few years, this was expanded to sales as well. Daewoo leased space in many Halfords stores for a mini-showroom… the sales staff there were Daewoo employees, not Halfords employees. I think it wound up being reasonably successful.
I’d completely forgotten about this! I remember the one in Aberdeen in the late 90s/early 00s when I was a kid.
Not sold but serviced by Halfords. They had thier own marked service bay.
Excellent article, Eric. I actually knew two people who owned Daewoos, one a Nubira sedan, the other the wagon. Never was in the wagon, but I rode in the sedan plenty. Generic, nothing terrible, nothing memorable except probably one of the coldest A/C systems I’ve ever experienced in a vehicle (the polar, ahem, opposite of my Focus at the time). Problem was, something fairly serious broke right about the time I would assume Eric points out above there was no way to get parts while GM and Daewoo were negotiating. Ashly threw her hands up and took a serious bath on the car, and went for a Jetta (that’s an even worse story, but I digress).
Two other interesting tidbits about Daewoo. For one, they were serious about bringing got the Tacuma here, which was an egg shaped approximation of what the PT Cruiser was. They had one at the Minneapolis Auto Show most likely the year before they went bust, so probably 2001. People were all over the thing, which I thought odd if you look at a picture of one. The other is that they factory sponsored a Nubira hatch in the 1999 season of the SCCA Pro Rally series. Likely their idea of youthful marketing. I found a photo from that year’s Lake Superior event:
Also, in a sort of revere effect Kensington situation, Daewoo had a concept called the Bucrane from 1995. A famous Italian automaker decided “we like that”, and bought the design. Anyone want to guess?
Maserati?
Bingo. 3200GT
Thanks for the short memories. Speaking of which, a loooong time ago I spotted while driving in Philadelphia a white Daewoo hatch with all the usual ground effects cosmetics, sporting “THE WOO” plates. Anyone else with a long memory have a picture?
Do you suppose the owner was consciously alluding to the line “pitch the woo with my baby tonight” from the song “Too Darn Hot”?
I actually started college around the same time Daewoo entered the US market, so I remember that whole marketing to college students strategy well. Something about them piqued my interest that I ended up going to their web site and reading about their models (probably just out of curiosity about “what the hell is Daewoo?” more than anything else). I wasn’t actually in the market for a car at the time, but I don’t recall being particularly impressed, other than by the low price. And when I found out they were Korean I’m sure the reputation Korean cars had in the US at the time didn’t help either.
Interesting that more Daewoos were manufactured in Poland than anywhere else outside of Korea. Wikipedia:
In 1999 the Lublin III was put into production.
Daewoo-FS Lublin 3
(User Mix321 on pl.wikipedia – own work (GNU Free Documentation License)
Yes, Daewoo’s Polish production was big — Daewoo bought local manufacturer FSO in the early 1990s, and quickly began producing large numbers of cars there. After Daewoo dissolved, FSO was in an odd position because GM did not pick up its factory in the takeover deal… FSO ended up negotiating to continue building Daewoo models, just rebranded as FSO’s… this continued throughout the 2000s.
The image below is a 2004 FSO Lanos ad:
Bought FSO in 1995.
Last car from FSO factory was produced in 2011.
It isn’t ad, just brochure of photoshopped Daewoo Lanos 😀 The same car.
Rented a Nubira back in 2001 on a short stay in Salt Lake City. Okay interior, but the engine was really buzzy and rough.
The photo of Daewoo’s HQ is in a prominent location, just across the street from Seoul Station. Next to the office building was/is the Seoul Hilton, which back then was owned by the Daewoo group – and the head of the hotel was Kim Woo-chung’s wife.
Mr. Kim was later a fugitive who fled Korea in the wake of his empire’s collapse – being wanted on fraud charges. Later he returned home – to face justice – he served some years in prison.
What did for Daewoo was the poor quality. Out of date designs with Japanese quality would have worked, but once word got out that the cars were crap, no amount of redbadging and length of warranty could save them. Terrible misuse of the Chevrolet brand as well. Not missed.
GM Canada had some weird Daewoo models that were branded as Optra, Epica and Orlando. They lasted all of a year.
I was living and working in South Korea from 1994-2004. In 1994, Korean consumers were routinely waiting a year to get a car as most were being exported. My Korean friends and students were all of a mind about Daewoo cars: that they were junk. In 1995, Daewoo could sell crap like the Espero simply because it was available.
The Tico was never that popular as it was correctly seen as a death trap.
Like all the chaebol, Daewoo was making pretty much everything, from ships, to cars to apartments. All the chaebol were over-investing at the behests of the Korean government. In order to have social peace for the 1988 Seoul Olympics, the Korean government promised every university grad a job in a chaebol if social peace were attained.
The government also mandated that the chaebol would be the country’s social welfare providers, with programmes such as free education and daycare. In order to soak up Korea’s 1970-1990 baby boom the chaebol were forced to expand to soak up all the university grads. The conclusion was that all the big chaebol were making the same stuff and competing with each other. To make matters worse, they were engaged in price fixing. Anything made in Korea cost double what it cost in a foreign market.
To finance it, the government authorised the banks to keep lending. The capital ratio of said banks was practically zero and then one day in 1997, it all came crashing down. Overnight, the Korean economy stopped. All the banks went bust simultaneously. This happened literally the day before payday. Many foreign staff simply left but I stayed on.
Our boss called a staff meeting and he hauled in a huge bag of cash. He gave each of us W1,000,000 and asked that we stay. The USD went from 700 to the dollar to 2400 in one day. This had a good and bad effect. Yes, my salary had been effectively cut by two thirds, but prices in Korea, which had been skyrocketing up with all the money being printed. Princes plunged: a W5,000 lunch became a W2,000 lunch almost immediately. Jobs were mine for the picking and right after the crash, I landed a job at at Kyungpook National University in Daegu. It was the best job I have ever had in my entire life.
Daewoo was only one chaebol that want bust. Many did and the upshot was the government picked the winners: Hyundai, Samsung and LG. Hyundai made the cars and heavy industry, Samsung electronics and ships and LG home appliances and other electronics. This had the effect of making the chaebol even more powerful in South Korea, as these three companies make up something like 60% of all Korea’s exports.
Watching an entire economy crash in one day was an amazing thing. After huge flim-flammery, (Buy Korea and Go Korea, for those in the know), the entire bill for this was taken out of the good Korean saver. Buy Korea and Go Korea were supposed to be investments to get the dirty IMF, which had come in and made Korea poor, out of Korea. Instead, the money was used to clear up old debt the chaebol held.
The investment bankers that made Buy Korea and Go Korea were eventually charged with fraud. They were found not guilty. The presiding judge thanked them for getting the hated IMF out of Korea. At least half the households in Korea lost their entire savings.
Thanks for this perspective. The entanglement of the Korean gov’t with the chaebol, and with financial institutions, was beyond the scope of this article, but it helps to explain some of the issues going on. For example, the Korean gov’t was Daewoo’s main creditor (either directly or through the Korean Development Bank), so that explains why Daewoo’s bankruptcy and auction were very different than would typically be the case in other countries.
Also, as I understand, the status of the chaebol as de facto social welfare providers helps to explain the panic among many people at the thought of GM’s takeover.
The panic over Daewoo’s purchase by GM had nothing to do with social welfare. It was 100% xenophobia. It was pretty obvious that it was either GM or the unemployment line. The Daewoo union was more than willing to sacrifice the jobs of its members to keep a foreign company out.
One has to remember that before 1998, very, very few Koreans had traveled outside Korea as it was basically illegal. Korean society has changed enormously since then, much of it for the better but very much for the worse. Much traditional Korean culture has been lost in only twenty-five years and that is truly sad thing.
At this time, the IMF required Korea to open its shut-tight markets. A good example is Walmart. They only lasted a couple of years because the Korean suppliers refused to work with them.
The other reason why Daewoo had to go to GM is that Hyundai had just bailed out/bought into Kia a year or two before and simply couldn’t stretch to doing the same again for Daewoo.
I occasionally see a Daewoo, usually a Leganza or Nubira, about once every other month or so. Usually a beater, clearly driven by someone with no other choice, but still chugging along after all these years. I have no idea where the owners find parts and service, but somehow, they make it work.
Thanks for this well-researched history of Daewoo in the U.S., Eric. I knew that GM ended up with full ownership of the company and can even remember renting a LeMans back in the day, but never knew the whole story…simply fascinating!
Excellent article, Eric!
Very interesting to see the use of “Daewoo, that’s who” in their marketing materials. In Australia, “Daihatsu, that’s who” was heard on TV commercials for many years.
As you included in the links, my family had a Nubira. If I recall correctly, it was a runout model but Daewoo had already announced it was shutting down in Australia despite having just introduced the replacement Lacetti.
It and the Kalos lasted roughly 12 months on the market, though they didn’t disappear for long – the Kalos (aka Aveo) controversially became a Holden Barina, replacing the rebadged Opel Corsa that had earned critical acclaim, while the Lacetti sedan (and its hatch and wagon counterpart) were sold as the Holden Viva.
Holden already had the small Astra at the time but it had been selling the previous-generation Astra as the Astra Classic, which IIRC they sourced from Poland and gave them an opportunity to offer a lower entry price in the segment. I believe that was just a stopgap though, and then the Viva came on. Funnily enough, I was just explaining to someone I met the other day that their Viva wasn’t built in Australia and was actually a rebadged Daewoo. I told him if you look at the Holden logo at the rear and how it’s so unbelievably tiny, you can tell the licence plate surround was originally intended for the wider, flatter Daewoo logo.
Daewoo first came here in 1994 and seemed to do a decent trade at first. They used a dog heavily in their advertising, which people seemed to find memorable. The 1.5i was just the old LeMans, and not even the facelifted model like y’all later got, though it was quickly replaced with the “new” (heavily restyled but same underneath) Cielo.
Daewoo seemed to do relatively well here, though I don’t have sales figures off-hand. My next-door neighbour had like an aqua/turquoise Lanos hatch which I have to say was a handsome car (and replaced a Daihatsu Charade, funnily enough). But our Nubira was crap, though never broke down on us. I suspect the Leganza was a more impressive car but I never got behind the wheel of one.
Interesting… I didn’t know that Daihatsu used the “That’s Who” slogan. I know it’s tacky, but I find that slogan much more memorable than Daewoo’s rather bland US ads. For example, it’s a whole lot better than the “Blending can be exciting” ad featured here in this article.
And maybe I’m mistaken here, but did Daihatsu also use a dog in their Australian ads? I seem to remember seeing those ads a while ago, though I’m not positive about that.
Oh, and I enjoyed your article about your family’s Nubira, too!
In two trips to Nashville in two consecutive years, our rental car was the same sort-of-gold-colored Daewoo Leganza. In many ways it was an outstanding ride, in that it was almost bad, handled almost badly, had a not quite awful interior with almost comfortable seats. The worst of it (probably) was that it was never quite awful enough to turn it in for a replacement, so we drove it to our weekend in Cave City and over the rural roads we preferred, always falling short when trying to express our discontent in any meaningful way.
So thank you for finally giving me several good reasons for not regretting my disdain for this little piece of doodoo, explaining how it came by its awfulness if not honestly, then at least deservedly.
There was a Lanos running around the South Bay that had it’s Daewoo badges removed and replaced by Lexus badges and nameplates. It resulted in a double take on my part. I stopped by a Daewoo dealership once, I was in the area, (really!). After checking out the cars I mentioned to the salesperson that they would be better off with different names, my suggestion was not favorably received.
No Daewoo experiences here, though they were not uncommon in Australia at the time. The little Matiz seemed to find a vacant market slot, and seemed to sell fairly well. The Leganza was just beautiful. I can’t remember what other cars they sold, nor what they looked like.
But as with all new brands, people need a compelling reason to bypass the brands they know and try an unknown. That reason just wasn’t there for Daewoo, except for maybe the Matiz and Leganza – which looked great. But great looks aren’t enough if the quality isn’t there. Despite the Holden engines, Daewoos became a joke – remember the scene in “Taxi” where Queen Latifah says “Ah don’t wanna get Daewoo on mah hands!” – that’s my main memory of Daewoo! And that was pretty much how we saw them in Australia too.
I always thought the rebranding to GM Korea was to get rid of the stigma around the Daewoo name, and never connected it with a change of ownership. Holden’s GM Korea products seemed to carry on the traditional Daewoo ‘quality’ though.
I’d forgotten that Daewoo had been independent of GM for those years, and had no ideas their financial crisis was so great.
The Matiz was a big seller in South Korea. It had the same running gear as the Tico but the upright design made it much more comfortable. It was also cute as all get out.
Interesting. The student advisors might explain something I’ve always wondered about. At Penn State in the ’80s there were a lot of Korean and Chinese engineering students, and they spent a lot of time arguing passionately about Daewoo cars. It seemed like an odd thing to get hot about, but if the Koreans were working on commission it might make more sense.
Excellent article Eric, thank you for that. I do recall Daewoos being somewhat popular in Western Canada for a time, but I had no idea of the history. Well done!
I had no idea that Daewoo was such a recent entrant into auto manufacturing. There have never been many around Ontario, but for the last several years there has been a bright green Lanos 3 door around my town. It is in remarkably good condition.
Wonderful article, thank you!
In 2002 my then fiance bought a Nubira 5 door hatchback off one of her coworkers for a fair price when her 1991 Dodge Colt would no longer pass PA state inspection due to rust. Needing a car in short order, it fit the bill. We lived in downtown Scranton PA and she preferred 3/5 door hatchbacks for her needs. It was a peppy city car with its 16V 2.0 4 and 5 spd trans (she despised automatics…)., and I liked it as the newer of our 2 cars. However problems began developing early in her ownership. The car would eat lower control arm bushings causing the front end to get horribly out of alignment, thus eating tires to the cords within the matter of a few months. PA potholes didn’t help. When the car was clipped while parallel parked in front of our apt., sourcing a rare Nubira 5 door tail light assembly/lens was impossible. After a few months of searching through the early 2000’s methods of locating new/used auto parts and failing, I resorted to crafting a lens with a generic sheet of translucent red plastic, a hair dryer, various epoxies and silicone sealants, and packaging tape in our tiny apt kitchen. It passed inspection and off we went. Until at 136k the head gasket blew and no one would work on it locally and I was not yet comfortable with that scale of repair on the side of the road. Off to junkyard it went and shortly after that we went our separate ways. I don’t blame Daewoo for that though….
Interesting that you all had a 5-dr. Nubira… I earlier commented that I can’t remember ever seeing one. Of course, yours wasn’t exactly the best ownership experience…
I have a 1994 Super Salon Brougham. It is indestructible. 27 y/o and still a daily driver.
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What a great tale, Mr 703 – Agent 703? – and clearly the result of a bunch of work. The resulting quality is more Lexus than Daewoo, it has to be said. Well done.
Kim woo-Choong sits atop an old conundrum, as for every riproaringly successful ubermensch in whatever industry, there’s very high odds that the selfsame person was at some point within a breath of the end, by fraud or ill-fortune, and missed it by that much. The cracks have expensive paper coverings when the person doesn’t fail: they have raw chasms of darkness when they do. The conundrum is that there’s probably little different between, say, a golden Lutz and a crooked Kim. (Does seems the auto industry gets more than it’s fair share of the brief-blazing hustlers, though, and in fact, the list seems almost longer than the good guys!) The conundrum is also in pondering whether or not it’s possible for big capitalist enterprises to exist at all without such types; my suspicion is not. Still, I guess if I abandoned the idea of responsibility in risking the money of others, I could be a candidate too.
The Daewoos we got in Oz rose from nothing based solely on price, but the later ones were decent buys for many, and my memory is that the whole shebang was professionally done and the growth excellent.
Yet after the GM buyout, the stuff we started getting as Holdens wasn’t much good, and became a significant factor in the ultimate demise of the brand. Anything not a Commodore or derivative was third-rate in its class. I strongly suspect GM spent very little money on manufacturing once they’d bought. Perhaps they thought it’s all cheap mass-market shitboxes from Korea, into China and third world, all volume and profits boys, forgetting small but influential markets like Oz (or the UK) were getting this increasingly poor stuff too. There seems no other reason why the quality of the Gm Korea products declined from that of Daewoo itself. (A disclosure: Gm’s unbelievably arrogant and dishonest departure from this land in 2020 has left me trusting them as much as I would a tobacco maker, so I’ve slight touch of bias gainst the miserable bastards!)
Not saying I mourn Daewoo, ofcourse, that’d be akin to becoming maudlin over the loss of a fridge. Mind, the 14yo kid here would mourn a lot if his Daewoo keyboard carked it – 20 years old and it’s still an absolute ripper of a thing.
Thanks! As you can imagine, I’ve been rather immersed in researching Daewoo as well as Kim Woo-choong, and yet after all of that research, I still find myself conflicted as to whether I more admire or loathe Mr. Kim. Successful and accomplished people always have complex personalities and legacies, but this one seems particularly tough to crack. On one hand, his accomplishments were remarkable, and the industrial development that he brought to his own country and elsewhere undoubtedly improved many people’s lives in some trying times. On the other hand, was it all built like a house of cards, just waiting to collapse? I don’t know… and can see it both ways.
In any event, I found the story to be considerably more interesting than the typical corporate bankruptcy. Glad you enjoyed it too.
In the auto biz when you hit it big you are either a Bob Lutz or a Chairman Lee OR you are a John DeLorean or Preston Tucker. Choose but choose wisely. It could easily go either way.
Please elaborate–what was arrogant and dishonest about GM’s departure from Oz?
Well, the bastards first they nicked off with local govt assistance money on closing in 2017 that had been given (in earlier packages) to keep them viable locally, (it’s never been properly explained how Detroit HQ held on to this $140-odd mill AUD), then the mongrels promised all sorts of corporate doublespeak bollocks about “transitioning to a full-import supplier” and being here for the long haul and blah blah, and getting dealers and others to invest before abruptly volte facing and pissing off altogether (insultingly saying they’re “retiring the brand”). Simply put, they lied, as there’s just no way such a major decision on RHD wasn’t long brewing. And, hell, if it wasn’t, then they’re as incompetent as their long, long decline has always shown them to be. (See Opel, which made money as soon as GM left the building).
And why the hell a 40-50K a year business on an iconic brand wasn’t viable – it’s a small market of about 1 million, and these are decent & profitable figures for other big players here – just shows how useless they were anyway.
Otherwise, I have no strong opinions…..
’94 Daewoo Super Salon
Outstanding article Eric. This was a great read, even though it is on a car brand I have zero interest. Much of this history is new to me and was quite interesting.
I knew a couple of people with Daewoos. One was a young couple who bought a door crasher Lanos 3-door with literally no options. It was pretty well completely done after less than a decade of service. But they were happy with it and it ended their perpetual cycle of bad used cars for not much less money than the new Daewoo. Another was a co-worker at a GM dealer I worked at. He bought a new Nubira. Most of us in the service department drove trucks or RWD GM cars, so he was the odd one out and got a few snide comments. But he justified that he got it new for not much more than a used car. Little did we know at that time, GM would be selling Daewoo designed vehicles in a few years.
Thank you very much Vince… I can’t say I had a deep interest in this brand prior to researching for this article either, but I found it was one of those rabbit holes that just kept getting bigger and bigger.
Sad thing is there is a market niche for that kind of vehicle and there is nothing today to fill it. There are no real “economy ” cars. That end of the market has been all but abandoned to the used car market. I’d love a simple commuter car FWD 3 door hatch 30 mpg 5 speed . Around 20K . Fat chance on that. And the few hatchbacks that are out there that look like the Aveo are vile. Something with a trunk/load area would be nice. (Small cars small profits I guess)
What’s a synonym for “stellar”? I think I use that word as often as “actually”. I’ll go with “terrific”, as in this bookmarkable article on Daewoo. Super writeup, Eric.
Thanks so much Joe; I appreciate it!
As for a synonym for Stellar… well, the Hyundai Stellar was Hyundai’s big RWD sedan, during which time the Daewoo Prince was Daewoo’s equivalent. So maybe Prince is a synonym for Stellar? Oh, just some Korean car humor… glad you enjoyed the article!
My uncle son was one of campus sell agent in late 90s, he was able to get two Daewoo cars, Leganza and Lanon, in heavy discount prices. They seem enjoying those cars. The Leganza was the main vehicle to replace their beat-up Mazda Protege. I drove it couple times in short distance, it was quite refined. I was impressed how easy and refined the engine started, no more than three cranks and started, in comparison with my 92 Interga often took few more cranks to start. But i did notice engine vibration in low speed. Of course, the dynamic and high speed stability were not match to Interga. Overall it was not a bad car. If i needed a vehicle for long haul, I would go for Civic or Corolla. In long run, you are probably saving more money.
One of my best friends has a coworker that has a Chevy Optra – 5 door hatchback, I am not sure of the year. She just uses it for city driving and is pleased with it, the black paint is still nice and shiny for a 15 year ish old car. I recall she was looking for a used car when her old Dodge Shadow convertible was written off after being hit while parked on the street. The dealership was offering blowout deals on the last remaining models and zero percent financing, she did not even test drive it, just looked at the numbers and signed on the dotted line. Says it is the best car she has ever had.
Very nice article!
One mistake is for Leganza launch. Here is 1998, because this is US version. In 1997 this model debuted in Korea and Europe.
Furthermore don’t forget, that 2.2 engine was prepared special for USA. In Europe and Korea was available in 1999 only.
Funfact that in USA the most popular Leganza trim was SE, but never available in Europe.
BTW. I’m huge Daewoo fan and have brochures, press kits, photos and adverts from around the world: http://www.darewnoo.pl/brochures/darewnoo-brochures
Nubira 5-door US was available only in late 98 and 1999, so very rare.
Some years ago a friend sent me a URL (which I no longer have) for a page of gravestones of Russian mobsters. I haven’t been to an actual graveyard lately, but apparently it’s possible to etch photos into gravestones, and many of the mobsters’ gravestones had gotten this treatment. One showed the deceased standing in front of his Daewoo–I assume a Leganza. I’d know that grille anywhere! Presumably he could have afforded any car he wanted, and he chose this?!!!
Isn’t Daewoo now making the Chevy Bolt fire starters?
No. It’s assembled at GM’s Orion, MI plant. The troubled batteries come from LG Chemical in Korea, which has no connection to Deawoo, or GM Korea.
You may be thinking of the Chevy Spark which is a small car built by GM Korea (formerly Daewoo). There was also a Spark EV, built there as well. No relation whatsoever to the Bolt in either form.
Sounds as if the campus advisers were what we call influencers today. Personally, I’ve always thought that pitching my friends and family in that manner would be bad manners.
The idea of selling through retail stores sounds like the way the Allstate (a badge-engineered Henry J) was sold through Sears Roebuck.
I’ve long lobbied for the retirement of the term “influencers” in favor of what they really are, “paid shills”…
I had a Daewoo – model Espero, year 1995 in Brazil, which was a version manufactured in Korea but only for the South American market. At the time, it was the best car I’ve ever owned.
file:///C:/Users/ja/Documents/Daewoo.htm
I knew a girl who bought one of these just before Daewoo folded in the US. The multi marque dealer was kind enough to call every so often when warranty money became available for repairs. After a while, he stopped calling.