The Telegraph
Since 1st March, 1999
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Daewoo woes deepen as sales drop

Seoul, Sept. 2 (AFP): South Korea’s Daewoo Motor Company today said its sales plunged 58 per cent in August from a year ago amid mounting troubles caused by the suspension of production and a delayed deal with US giant General Motors Corp.

Daewoo said its sales stood at 22,952 units in August, down from 39,651 in the same month a year earlier and down 63 per cent from 36,219 in July this year.

The company’s domestic sales grew 19.7 per cent year-on-year to 15,934 in August but exports nosedived 73.4 per cent to 7,018.

In the eight months to August, Daewoo sold 81,126 vehicles, down 12.5 per cent from a year ago. During the same period, its domestic sales increased 2.8 per cent to 114,468 but exports plunged 20.6 per cent to 166,658.

Daewoo officials warned its sales would dip further in September due to the shutdown of car plants from last Wednesday.

Suppliers stopped shipping parts to the embattled company until they receive money they are owed.

GM signed a deal to buy Daewoo in April, promising to put it into a new corporate entity in July. But the deal has been delayed because of a dispute among creditors over how to share losses and new loans totalling some $ 2 billion.

Daewoo officials have warned the shutdown could threaten the GM deal. But suppliers have been defiant, insisting they are on the brink of collapse due to delayed payments.

Creditors are yet to work out a settlement on how to share the proceeds from the Daewoo sale and what to do with the parts of the firm which GM is not buying.

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