South Koreans will see more cars and dealerships carrying the Chevrolet logo as General Motors Co. focuses on its core brand globally.
General Motors took a big gamble in South Korea at the start of March by getting rid of the brand name that was long familiar to Korean shoppers, Daewoo, in favor of its Chevrolet brand. So far, the transition is going smoothly, says Mike Arcamone, president of GM Korea. In the past four weeks, GM has re-outfitted its Korean dealers with Chevrolet signage and merchandising. More importantly, car inventory has rapidly shifted into Chevrolet-only product. Daewoo is one of the classic names of Korean business history, one of the major conglomerates to have been built during the 1960s as the country began its meteoric rise from poverty. But it was also the biggest conglomerate to fail during the country’s financial crisis of 1997-98. GM bought Daewoo’s car-building assets in 2001. But GM kept the Daewoo name, in part because South Korean consumers have long tended to favor Korean brands over foreign ones. Renault Nissan bought the car assets of Samsung under the same circumstances and in the same time frame and continues to brand its South Korean cars as Samsung, though they are basically re-badged Nissan models. But the Daewoo brand was tired, Mr. Arcamone said in an interview at the opening of the Seoul Motor Show on Thursday. And the move with the broader reshaping of the General Motors, which recently exited a bankruptcy process that allowed it to trim its brand portfolio and shed troubled assets. “Chevrolet is a global brand, an iconic brand,” he said. “Our studies demonstrated the Korean consumer was ready for this.” This year, Chevrolet will celebrate its centennial. At the Seoul Motor Show (which actually takes place in the suburb of Ilsan), GM added a couple of classic Chevy models sent in from Detroit and placed them near a futuristic concept roadster, dubbed Mi-ray, that was designed in Korea. GM Korea has the third-largest booth at the auto show, after the soccer-field-sized booths of Hyundai and Kia, which together account about 75% of all auto sales in the country. The giant gold Chevy emblem that dominates the booth is visible from much of the convention floor. A small part of the booth displays Cadillac models. The name change came just a few months after the South Korean and U.S. governments in December hammered out the final details of a free trade agreement that had been bogged down by perceptions that U.S. car makers didn’t fare well in the South Korean market. GM Korea has had about 15% market share under the Daewoo brand, but U.S. lawmakers, pressured by Ford and Chrysler to seek better terms in the FTA, rarely acknowledged GM’s toehold in the Korean market. Mr. Arcamone said the timing of the name change was unrelated to the FTA, which GM officially took a neutral stance on. He said the change took a long time to plan and execute, involving tens of millions of dollars in production and merchandising expense. “We never decided to wait for the outcome of the FTA,” he said.◦