Holden and Daewoo Forge Closer Ties

By Feann Torr - 12/04/2005

If you read the motoring news this morning, you'd already know that Holden will begin exporting its globally popular 3.6-litre V6-powered Statesman to Korea, badged as a Daewoo.

A mildly interesting piece of news on its own, made moreso by the the fact that GM and Holden decided to kill off the GM Daewoo in Australia mid way through 2004, with all dealerships shutting down by that year's end.

One of the reasons Holden gave for ending the Daewoo brand in Australia were issues such as an unfavourable exchange rate and increased competition in the small car market.

But as a press release from GM Daewoo asserts, the company will begin exporting vehicles from Korea to Australia again "beginning in the second half of 2005", and they'll be badged as Holdens. The Holden Lanos anyone?

As we understand it, Holden is facing pressure primarily from the Japanese marques - Toyota, Nissan, Suzuki - where it's own cars, sourced from Opel and mainly built in Europe, are struggling to compete.

Though nothing is set in concrete yet, it's a fair bet that cars like the Barina and Astra may be phased out over time to make way for much cheaper vehicles built by GM Daewoo, which would allow it to better compete with its Japanese small car rivals.

According to the press release, exports will begin in the second half of 2005, so it'll be interesting to see what new models Holden is planning. Who knows, maybe even the Matiz will make a triumphant return?

The press release states that GM Daewoo "will develop and manufacture vehicles especially for GM's Holden brand. The specific models and official timing will be confirmed at a later date."

So, GM Daewoos will be badged as Holdens and Holdens will be badged as GM Daewoos, which, according to GM Daewoo President and CEO Nick Reilly, is win-win for both brands: "We are proud to be adding Australia and Holden to the growing roster of markets and brands that have selected GM Daewoo's Korean product development and manufacturing expertise to help meet their product needs. Holden is the premier vehicle brand in Australia and has that nation's strongest sales network.

"By leveraging each other's resources to complete each other's product lineups, we are creating a win-win situation for both of our companies and our countries. Most important, we are providing a greater number of choices for consumers in Korea and Australia," Reilly concluded.

Korea is in a better position geographically to take advantage of lower shipping costs, and a more favourable exchange rate than the Euro may also help reduce costs for Holden.

Holden supremo, Denny Mooney, who is also a member of the GM Daewoo Board of Directors had this to say: "There is a tremendous relationship between Holden and GM Daewoo. It is a relationship that is growing stronger by the day.

"Capitalising on GM Daewoo's capabilities to build the Holden portfolio will further strengthen the relationship between two key members of the GM family in the Asia Pacific region and two successful exporting companies. At the same time, it will play an important role in enhancing two-way trade between Korea and Australia."

Holden has assigned a number of its senior designers to the GM Daewoo Design Centre, located in Incheon, Korea, to give any upcoming models a more Australian flavour.

GM Daewoo is based in Incheon, Korea, and was established back in 2002. Not a small car company by any means, the company sold more than 900,000 vehicles in 2004 and has and has manufacturing facilities in Korea and Vietnam.