Daewoo Motors

» see daewoo.com as it lived, on the wayback machine

~ the eulogy ~

Daewoo Motor Co. filed for court receivership in Seoul on 10 November 2000 and the Korean court appointed a receiver; the reorganization proper began on the thirtieth of that month. It had been the second largest carmaker in South Korea, with assembly plants as far apart as Poland and Uzbekistan. It went down because the conglomerate above it went down first. The Daewoo Group collapsed in 1999 owing something in the region of eighty billion dollars, which at the time was the largest corporate failure anyone had recorded.

In Turkey it was a badge near the bottom of the price list. The Nexia came in as a sedan and a hatchback and the Tico was a box you could park anywhere. The Matiz arrived in 1998 and stayed on sale here for years after that. This was the window when a Turkish family buying its first car had exactly two realistic options above the second-hand Şahin, and a Korean import undercutting everything from Europe was one of them. i was at school and then at university through all of it with no money and no license, so what i remember is the advertising and the price, which is most of what Daewoo was selling anyway.

The company as a company dated to January 1983, when the Daewoo Group took the old Saehan Motor operation and put its own name on it. The factory underneath was much older than that. Bupyeong in Incheon had been building vehicles in one corporate costume or another since 1937, and had already passed through Saenara and Shinjin and a joint venture with General Motors before Daewoo ever got near it.

General Motors came back for the wreckage. It agreed terms in 2002 and launched GM Daewoo Auto and Technology on 17 October that year, paying $251 million for a minority stake in a deal reckoned at around $1.2 billion with the creditors' share included. The badge survived the company by eleven years. In 2011 GM Daewoo became GM Korea and the cars became Chevrolets.

~ the dossier ~

~ the years it worked ~

The strategy was volume in markets the Germans and the Japanese were not fighting hard over. Daewoo bought FSO in Poland in 1995 and took over a Romanian plant, then put up assembly lines from Uzbekistan to Vietnam. By the late nineties it was selling across eastern Europe and central Asia at prices nobody else wanted to match. In 1997 it launched three new models at once, from the Lanos at the small end up to the Leganza, each of them styled by a different Italian house so that a range appearing out of nowhere would not look like it had appeared out of nowhere.

Then the Matiz in 1998, which was the one that actually worked. A Giugiaro design that had been drawn for Fiat and turned down, it became a city car cheap enough to be a first car and small enough to be a second one, and it outlived the company that built it by a very long way. The Korean market still had a version of it on sale into the 2020s under other names.

The problem was how all of it had been paid for. Daewoo expanded on short-term debt during exactly the years when short-term debt in Korea stopped being available. The 1997 crisis hit the chaebol structure at the point where it was weakest. The group had taken on more leverage than any of its rivals, and when the banks stopped rolling the paper over there was no equity underneath to absorb it.

~ the badge after the company ~

Kim Woo-choong left the country when the group failed and stayed away for nearly six years. He came back in 2005 and was convicted in 2006 of accounting fraud and embezzlement on a scale that made the numbers themselves newsworthy. A pardon arrived before he had served much of the sentence, and he died in 2019. His defense throughout was that the government had told him to keep expanding and then changed its mind, which is not a complete answer and is not entirely wrong either.

The name took a while to disappear because it was still doing work. Cars badged Daewoo were sold in Europe until the middle of the 2000s and in Korea until 2011, and Uz-Daewoo kept building them in Asaka for years after Seoul had stopped caring. What finally retired it was not a failure but an accounting decision at General Motors, which had a global brand it preferred and no reason to maintain a second one. daewoo.com does not resolve.

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