Michael Grimaldi, President, and CEO of GM Daewoo and Vice President of General Motors talk about the significance of General Motors Daewoo Auto & Technology (GMDAT) to General Motors. This was an hour-long chat that I have cut down into five minutes.
Some interesting facts from Korea:
I was talking to a person yesterday that was surprised to find out that Hyundai and Kia are Korean-built cars. They thought they were built in Japan. You can imagine their surprise when they found out that General Motors made cars in Korea.
Korea is the fourth largest country in car sales in the Asia Pacific group. When manufacturers talk about Asia Pacific (AP), they don’t just mean China and Japan.
The Asia Pacific is made up of seven countries:
When I lived in Japan the yen was 360 to the dollar. Today it is almost equal, dollar to dollar. People know that Japan is expensive, but Seoul trades places with London and Moscow for one of the top three most expensive cities in the world. One journalist had a tall Starbucks mocha that would normally cost about $3 in the States. In Seoul, the same size mocha cost almost $6.
General Motors Daewoo Auto & Technology (GMDAT) was established on October 17, 2002. GMDAT sprung out of the bankruptcy of Daewoo. Fifty-one percent of GMDAT is owned by General Motors, with creditors owning 28 percent, Suzuki owning eleven percent, and Shanghai Auto (SAIC) owning 10 percent. Certain assets were purchased from the bankruptcy sale, not the entire company, according to Grimaldi.
GMDAT is the third largest group in 2007 car sales in Korea, owning 10.3% of the market. Hyundai was first with 49.2%, followed by Kia with 21.3%. Ssangyong owns 9.2 percent of the market, and SAIC owns 51 percent of Ssangyong.
The Winstorm, the first new product for GM Daewoo, is number two in the SUV segment, and solidly owns the mini-car segment. GM is looking at producing an LPG vehicle in the mini-car segment, the alternative fuel in Korea. GMDAT may be involved in the fuel cell vehicle as well.
GMDAT sells nine vehicles in Korea;
Matiz – MINI (aka Chevy Spark)
Gentra (aka Chevy Aveo)
Lacetti (aka Chevy Optra or Cadillac Excelle)
Tosca – passenger cars (aka Chevy Epica)
L4X Show car (imported from Australia)
Winstorm – SUV (aka Chevy Captiva or Opel Antara)
Damas/Labo – mini commercial vehicles
G2X – sport (imported – aka Saturn)
Legacy architectures will continue in the GM lineup, globally, mainly in the developing markets. Poland will be helping produce products for GM, with a new joint venture between GMDAT and UkrAvto. The agreement was signed last fall and they expect the deal to be finalized soon.
GMDAT produces vehicles and composite knockdowns (CKD) for Chevrolet, Buick, Opel, Vauxhall, Pontiac, Holden, and Suzuki that are offered in more than 150 markets on six continents.
Sales have increased from 600,000 unit’s in 2003 to 1.88 million units in 2007. 1,756 million of those cars are exported, while 130,000 are sold in Korea.
Do you know how manufacturers sell to dealers, then the dealers sell to customers? It’s not the same in Korea. DWMS buys all the cars, sells them to the dealers, and then the dealers sell to the customers. GMDAT did introduce test drives to customers in Korea.
And GM has not had any major work stoppages since 2002, since GMDAT took over. Guess they’ve learned a lot dealing with the UAW!
GMDAT is positioning itself as the home of General Motor’s global small and mini-car architectural development teams and has plans to expand international business through Korea. Those two segments alone account for 15 million units, globally, per annum.
GMDAT is also an integral part of the global design center headed by Ed Welburn. Welburn’s counterpart in Korea is a Korean, Tae-Wan Kim, that holds a master’s degree in Vehicle Design from the Royal College of Art and a bachelor’s degree in arts in Transport Design from Brigham Young University.
Kim has designed for British Airways, Fiat, Daewoo. Kim led the exterior design of Magnus, Lacetti, Kalos, and Matiz.
Expect to see a new product from Korea, almost every six months for the next couple of years.
One of Grimaldi’s last statements was, “General Motors philosophy is that they intend to build where they sell.”