An Import by Any Other Name
Introduced in 1981 as a 1982 model, the Chevy Cavalier has served GM well as an entry-level vehicle and fleet unit. After a twenty-plus year run, the old platform has fallen behind the refinement offered by competing models from Japanese manufacturers. The result has caused General Motors to rapidly lose ground in the compact segment of the market, making a huge investment to reverse the hemorrhaging inevitable.
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| Daewoo had been making small cars since the mid 1950s, but when they fell behind in the market bankruptcy loomed. (Photo: Daewoo) |
Enter Daewoo. The automaker, hardly known to Canadians, has manufactured small cars and a variety of utility vehicles in Korea since the mid 1950s. Although robust, these vehicles were starved of research and development. Somewhat outclassed by other Asian auto manufacturers and overwhelmed by an unstable Korean economy, Daewoo found itself grounded on the shores of bankruptcy.
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| In October 2002 a new subsidiary called GM Daewoo Auto & Technology was formed. (Photo: General Motors) |
The world's largest auto manufacturer, General Motors, has enormous research and development capacity. What they didn't have was a series of strong contenders in the huge, worldwide market of modern, efficient compact cars. It doesn't take an MBA to figure this one out: By combining forces in October of 2002 with Daewoo and partnering with Suzuki, General Motors applied a tourniquet to the internal bleeding in the form of a dynamic new subsidiary known as GM Daewoo Auto & Technology, or GMDAT for short.
General Motors owns 41.9% of GMDAT, Suzuki owns 14.9%, the Shanghai Automotive Industry Corp. owns 10% and 33% goes to the Korean Development Bank. Now that the pie slicing is complete, let's examine this latest example of automotive globalization: The Chevy Optra.