S. Korean autos aim for student market

By Tracey Philips, On-line Forty-Niner

April 15,1998

 

 

SEOUL - In a campaign targeting college students, Korean conglomerate Daewoo Motors Inc. will launch three cars into the United States automotive market in August to coincide with the new school year.

 

Daewoo, which is hoping to use price, design and service to make the cars appealing to students and their parents, brought eight U.S. college journalists to Korea to test-drive the cars and tour the company's manufacturing lines.

 

It is the third South Korean car company to enter the U.S. market, behind Hyundai and Kia.

 

"Our biggest obstacle is product perception," Jae Chan Park, president and CEO of Daewoo Motor America (Central) said, referring to Hyundai's failure to provide quality and service in an attempt to keep up with demand.

 

"Ride & Buy," an innovative, extended test-drive program, begins in May, when Daewoo plans to give 500-1000 cars to "opinion leaders" on college campuses for six months. Drivers are to include members of student government, athletes and even administration and faculty.

 

Daewoo will fully insure the car during this period, park said, adding that the particulars are still being worked out.

 

There will also be a one-week test drive available.

 

Eligibility for both depends on grade-point average, a clean driving record and no prior legal incidents with drugs or alcohol.

 

"Even if students drive the car for one week without any intent to purchase, we feel confident they will tell other students they drove a nice car for one week, so we'll still get good publicity from it," Park said.

 

The company also plans to launch a below-market financing program for students only.

 

The program is based on word of mouth, which saves on advertising and marketing expenses, and focuses on low monthly payment plans while students are still in school.

 

Daewoo will start with 16 dealerships in nine states, focusing primarily on Southern California.

 

The company plans to open dealerships and/or service centers within a 50-mile radius of college campuses throughout the country and provide 24-hour roadside assistance at no charge, in an attempt to woo wary buyers.

 

Maintenance and repair service will be provided by authorized Daewoo Service Centers established through contracts with national auto-care chains.

 

Daewoo is also in negotiations with General Motors Corp. to make GM a 50 percent owner of the company, enabling Daewoo to further cut costs by manufacturing its cars in existing U.S. plants.

 

The subcompact Lanos, which resembles the Ford Escort, will be priced from $9000-10,000; the compact Nubira, which resembles the Honda Civic, from $12,000-$15,000; the mid-size Leganza, which resembles the Honda Accord, from $15,000-$19,000.

 

Daewoo currently sells 1.4 million vehicles in 130 countries worldwide, with plans to reach 2.5 million by 2000.

 

The company has a goal of 100,000 U. S. car sales annually within five years.