Daewoo in about-turn with move to dealers

By DAVID LINKLATER

The direct approach is always best. Right? Not if you ask Rapson Holdings, recently appointed distributor of Daewoo cars in New Zealand.

Remember the controversial Daewoo Direct sales programme? It eschewed conventional new-car dealerships in favour of telephone-friendly sales teams that sold cars straight from the importer through an 0800 number.

All vehicles came with a Daewoo Total Care package that provided free servicing for three years or 100,000km.

No more. Since taking over distribution in August 2000, Rapson has axed the Daewoo Direct scheme and started marketing the Korean brand through traditional dealerships.

It bought Colin Bower Cars on the North Shore and has transformed it into a flagship showroom, Daewoo Auckland.

The company has also appointed dealers in Whangarei, Tauranga, Palmerston North, Wellington, Christchurch and Dunedin, with more promised.

Last week Rapson also relaunched Daewoo to the media, with the spotlight on an all-new model, the Tacuma hatchback.

"I wouldn't necessarily call Daewoo Direct a failure," says Rapson managing director Russell Burling, who owns 50 per cent of the new company. "Don't forget that there's now an owner base of 7000 Daewoo vehicles in New Zealand.

"But it ran its course. About 90 per cent of the business was for fleets, and discounts of 30 per cent were common. The Total Care programme was too expensive for the company and there was no infrastructure for the used cars coming back in, which resulted in poor residual values.

"Also, when we took over, our research showed that while public awareness of the brand was extremely high, many people couldn't name a single Daewoo model."

The Daewoo lineup is now being sold with a conventional three-year, 100,000km warranty instead of the all-expenses-paid service programme (though Total Care continues for cars sold under the direct scheme). The new dealer network will provide an important channel for used cars, while Rapson hopes that interesting new models like the Tacuma will put the emphasis on product rather than the politics of selling.

The Tacuma is Daewoo's answer to mini people-movers like the Renault Scenic and Nissan Tino. New Zealand's CDX model is powered by the same 89kW 2-litre General Motors engine as the Nubira. The car showcases striking Pininfarina styling and features five individually mounted seats, dual airbags, anti-lock brakes with electronic force distribution and air- conditioning.

The Tacuma is priced at $34,500 in five-speed manual form and $36,500 as a four-speed automatic.

More new Daewoo models are set for a mid-2002 Kiwi launch, including a Lanos and a larger replacement for the Leganza, the Magnus, which will use both 2-litre four and 2.5-litre straight-six engines. The Matiz and Nubira models also continue.

Daewoo claimed 2 per cent of the new-car market in 2000 but Burling has ambitions to raise that figure to 4 per cent by 2003, then hit 5 per cent in 2005 - about 4000 sales.

However, he also admits that sales growth can only begin after Daewoo's well-publicised difficulties in Korea are resolved.

Ford fought hard to purchase the troubled Korean carmaker last year but pulled out at the last minute. Daewoo was declared bankrupt in November.

Government-approved restructuring, which required 5000 voluntary redundancies and another 1750 job cuts, resulted in disaster, with ongoing protests and rioting by outraged employees.

General Motors is negotiating to buy debt-ridden Daewoo. If that deal stalls and no other buyer steps forward, it is likely the company will be nationalised.

Either option will work fine for Rapson's Kiwi operation, says Burling. "There's no doubt that sales have been affected by the problems in Korea. It's pretty tough at the moment, especially when we have prospective dealers who are holding out for some positive news. But we're prepared to wait."

Nor is Burling pessimistic about relaunching a value-conscious brand into a Kiwi market dominated by used cars.

"The biggest potential for new-car sales growth lies with buyers of secondhand vehicles. I think that Daewoo can reach down and grab some of that market. People will turn away from used imports and start to see the value in new cars again.

"Believe me, in the next three to five years our time as a new-car company will come."

Rapson has also picked up the distribution for another Korean brand, SsangYong.

Last seen in New Zealand two years ago under the auspices of then-Mercedes importer German Motor Distributors, the twin-dragon badge is back on a brace of big four-wheel-drives: a facelifted version of the familiar Musso ($46,000-$70,000) and a strangely styled three-door called Korando ($43,000-$46,000).

DaimlerChrysler New Zealand no longer has any connection with SsangYong, but internationally Mercedes retains its 5 per cent shareholding in the company.

There are entry and luxury variants of the Musso, each available with two Mercedes-sourced engines: an 88kW 2.9-litre turbo diesel, or the storming 161kW, 3.2-litre straight-six used in some previous-generation E and S-class models.

Both engines are available with manual or five-speed automatic transmission.

The Musso and Korando have separate chassis construction and "shift on the fly" four-wheel drive. The top LX and DLX Mussos also provide seating for seven.

On the way for 2002 is the Y200, an all-new, super-luxury four-wheel-drive which is touted as SsangYong's answer to the BMW X5 and Mercedes M-class.