Daewoo M100 Rollout In 98 Aug, 2 Others To Follow

The Maruti 800 challenger from Daewoo Motor -- loosely based on the concept of 'Matiz' -- will hit the showrooms in India in August 1998. This will be the first out of the Project M100 (code name for the small car project) in February 1998 when it will be launched to supplement the Suzuki 800 clone, Tico, in the domestic Korean market.

The Project M100 is not just directed at the Maruti 800 in India, but Daewoo has ambitious plans of incorporating three engine options. This should worry Maruti Udyog Ltd (MUL). Another MUL product that will be affected is the Omni which now enjoys a considerable price advantage and is also the second largest selling car after the Maruti 800 in India.

 

Announcing the decision to have three engine and two body style variants for the Project M 100 platform, Daewoo Motor Chairman Kim Tae-Gou told Business Standard the company will be strategically pricing the 800 cc to get an entry into the largest market segment in India, but will make it up with sales in the compact segment by addressing the needs of an emerging replacement market.

The 800-cc unit will be positioned against sub-compacts like the Maruti 800 and the yet-to-be launched Hyundai MX (HMX). The 800 cc is expected to be priced slightly above the Maruti 800 at Rs 2,60,000. The Hyundai HMX will feature a fuel injected 1000 cc engine option and a multi-valve engine head.

Besides, a slightly different body style built on the same platform and powered by a 1000 cc engine will be positioned against the compacts like the Maruti Zen and the Fiat Uno. The second body option may be that of a Multi Purpose Vehicle (MPV).

Kim added that the third engine option, 1,200 cc, should attract prospective buyers of the Rs six lakh plus mid-size saloons since it will provide comparable performance for much less.

The M100 platform and the engines will offer many new features such as multi-point fuel injection for better response and fuel efficiency and state-of-the-art instrumentation. In India, only mid-sized cars feature fuel injection systems in India.

The $ 68 billion South Korean giant has already invested Rs 2,800 crore out of the total planned investment of Rs 3,500 crore. A major part has been in the engine and transmission plant (300,000 units each per year). The existing installed capacity of 70,000 at the Indian plant in Surajpur is expected to cross 100,000 and eventually reach 225,000 units as the rest of the investments flows in. The highlight of the plant will be to enable multiple model assembly lines.

Also on the launch pad is the Nubira, a contemporary mid sized model to supplement a facelifted Cielo which is also expected soon. The Nubira, tailored as a Euro sedan is being built at the Kunsan plant of Daewoo in South Korea. In India, Nubira will feature a 1500 cc double overhead cam (DOHC) engine sourced from the engine and transmission plant of Daewoo Motors India.

Also in the pipeline is the luxury sedan Leganza which will take on the largest auto market in the world, US, this year. The Leganza once launched in India will be powered by a 2000 cc DOHC engine and will fill in the price gap between top of the line mid-size cars and the Mercedes Benz E class.

Leganza, expected in late 1998, will sport a price tag of roughly Rs. 15 lakh.

Local content development, high volumes and export of over 50 percent are part of Daewoo's gameplan. No Indian manufacturer has exported 50 per cent of its capacity from India. In addition, Daewoo Motors India is all set to sell half a million cars in India in five years and double that figure in another five years time.

The current eco-political climate in the country does not favour such ambitious plan and especially of the Daewoo kind that is pointed at expansion rather than growth funded heavily by debt. But no one at the Daewoo group, from founder and chairman Kim Woo Choong to Daewoo Motors chairman Kim Tae Gou seem to be unduly worried.