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HomeFeatured ArticlesWhat really went wrong with Daewoo Cars in India?

What really went wrong with Daewoo Cars in India?

With the advent of the automobile industry in India, there were a lot of foreign companies trying to make a mark in the Indian market. Some companies like Maruti Suzuki and Hyundai Motors were really favoured by the Indian customers. Then there were some companies that were not able to make it big in the world’s most sought-after market and returned. One such company was Daewoo. But why the company failed? Did they not offer good cars? Or were the cars too good to be true? Let’s explore. First of all, we’ll have a look at the cars from Daewoo that made it to our shores.

  1. Daewoo Cielo

    Daewoo Cielo
    Daewoo Cielo

    The sedan was the first car from Daewoo in India which came with a whopping price tag of ₹5.46lakhs at that time. It was the first car in India that came with a fuel-injected 1.4-litre engine which could produce 71hp of power and 128Nm of torque. The major challenger to the car was Maruti Esteem which obviously was the chosen one due to its aggressive pricing.
    Have a look: Maruti 1000 (Maruti Suzuki Esteem) | Sedan of the yesteryear

  2. Daewoo Matiz

    Daewoo Matiz
    Daewoo Matiz

    This small hatchback which was launched back in 1998 made it to the hearts of Indians. Although it was the only Daewoo that made it big in the Indian markets. It was equipped with a 0.8-litre engine that was capable of producing 52hp of power and a peak torque of 71Nm. But the USP of the car was the features it came equipped with. With power windows, power steering, air conditioning and much more, Matiz was the best-in-segment at that time. The Matiz used to cost between ₹3-4lakhs.

  3. Daewoo Nexia

    Daewoo Nexia
    Daewoo Nexia

    The company after the failure of Cielo tried to tap in the sedan segment in India again with the Nexia. But again the company failed to attract the consumers in the country with vivid tastes. It was equipped with a 1.6-litre engine which produced 93hp of power and 132Nm of torque. The engine was mated to a manual as well as an automatic transmission too. It was priced at ₹6.22lakhs.

Even with the cars way ahead of their time and loaded with features and power, the company failed in India. The key reasons behind the downfall of Daewoo were:

  1. “Mehnga Hai, Theek-theek laga lo”

    There is a reason I mentioned the prices of the cars while writing short descriptions. The major reason for the cars to fail was their prices. They were way too much when compared to the rivals in the market. One will justify the prices by saying that the cars had features as well as power. But the automobile industry just began to rise in India. The customers were not well aware of the features. Fuel efficiency and price were the only aspects people used to look for at that time. Thus the rivals were always chosen.

  2. “Jo Dikhta Hai Vo Bikta Hai”

    It’s true, especially in India. The company did a really bad job with its promotions. Initially, they placed their vehicle in the premier segment and then at the same time started offering unheard discounts on their rides. The consumers got really confused because of this and they failed to understand the company’s place in the market. Due to average performance, it’s cars failed to stand at the premier segment and also due to the high price it failed to justify its place in the middle segment. Due to this, they couldn’t find many buyers in the market and it really affected their sales in India.

  3. Little Knowledge is dangerous

    It is really important to understand consumer trends in a market where the company is planning to launch its vehicles. This seems to be the major cause of the downfall of the company in India. Daewoo was not able to properly assess our country’s market for sure.

  4. One thing led to the other

    With lowering sales and increasing losses, Daewoo decided to give huge discounts on the cars. The price cuts were drastic and only added fuel to the fire of losses. The company saw a loss of over Rs 351.4 million in 1998 and its sales decreased to Rs 1.22 billion compared to Rs. 2.7 billion in the previous year. The Indian market was proving to be a major downfall for the company.

Eventually, the company went bankrupt and was bought by General Motors in 2002. The Indian automobile market has proven to be a goldmine for major automakers around the world. One such example which is pretty recent is Kia’s success in this market even when the industry was walking on thin ice. Let’s hope that all the companies that are planning to come to India in the near future are able to completely read the market and make it big in the industry.

Also read: How the Kia Seltos took India by storm? An Insight!

Ritvik Gupta
Ritvik Guptahttps://gomechanic.in/blog
Ex-Technical Content Developer at GoMechanic | Automobile enthusiast with a knack to decode it for everyone | Automobile Engineer by passion

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