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Daewoo trims bus production to meet demand for Matiz

Byas Anand in New Delhi

The South Korea-based Daewoo Motor Company Limited has decided to curtail production of buses at its Indian subsidiary -- Daewoo Motors India Limited -- and has put off plans to introduce a range of commercial vehicles in the country.

The company has, instead, decided to concentrate on its small car, the Matiz, which has turned out to be a money-spinning product for Daewoo, company sources said.

DMIL had last year introduced two buses -- the Royale and Caravan, and announced plans to foray into the commercial vehicle (CV) segment with the launch of a six-tonner truck by 1999-end.

However, stung by a deepening recession and stagnant demand for its buses, both from domestic and export markets, Daewoo has trimmed down production of the buses to near-zero levels, the sources added.

''The buses are now being produced only as and when demand trickles in.'' Eyeing the recession in the segment, it has also applied brakes on plans to foray into the CV segment.

''It does not make business sense for us to foray into these segments for the time-being. Presently, we want to concentrate only on passenger cars,'' the sources said.

The buses, it may be recalled, were offered in two variations -- deluxe and standard. While the deluxe version offered luxury seating to 19 passengers, the standard model has the capacity to seat 30 persons. The Caravan would carry a price tag of Rs 760,000; the Royale would be priced at Rs 808,000. The buses were developed by Global Research and Development in collaboration with a Czech company -- Avia.

DMIL managing director Shiv Gopal Awasthi said that production of buses has been curtailed as all resources have been diverted to meeting the increased demand for the Matiz. ''We are presently producing close to 3,000 units of the Matiz per month and this would be hiked to 5,000 units per month by March, 2000. Next month, we intend to go to second shift. Due to these reasons, the commercial vehicle production capacity is lying idle.''

The proposed launch of commercial vehicles, Awasthi said, has been delayed as the company has not been able to zero in on particular models to be introduced in the Indian market. ''The production capacity is available with us and will be utilised as and when demand comes in.''

Meanwhile, Awasthi stated that Daewoo Motors India is planning to launch a new luxury car in India next year. However, he declined to divulge details. But sources pointed out that the company is working towards introducing the Nubira in India.

''There will not be any new launches this fiscal. The new car would be introduced only towards the second half of the year 2000,'' the sources added.

UNI

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