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The Rediff Business Interview/Young-Chang Kim

'Matiz will be the best selling car in the coming year'

Young-Chang Kim took over as managing director and chief executive officer of Daewoo Motors India Limited last week, following his predecessor SG Awasthi's appointment as the chairman. With the small car segment in India stepping on the gas pedal once again, Awasthi and Kim are now all set to let the company go into an overdrive on the Indian roads. Kim spoke to Neena Haridas about his plans for the company.

Mr Kim, you have been with Daewoo India in various capacities for several years. What are the changes that you would like to bring about now that you have taken over as the managing director?

First of all, I would like to bring down the costs. I don't mean cost of production alone, but over all cost-cutting. I wouldn't want to spell out the figure, but definitely in the next six months, I would like to see the company perform more cost-efficiently -- produce more cars at the same cost to the company. Overall, increase productivity and efficiency of the plant. By March 2000, the plant will function on full double-shift, thus increasing the capacity.

Does this mean there will be lay-offs too?

Well, not at present. I don't have plans to cut workforce right now. You see, my ambition is to jump into profits in the next fiscal, and for this I need the people.

What are your targets for the next fiscal year?

As I said, I intend to post profits on a turnover of Rs 31 billion. We will be ending the current fiscal with a turnover of Rs 13 billion posting some losses. Then we also intend to increase our capacity. With full double-shifts, we will be making 90,000 units per annum. To begin with, from July 2000 onwards, we have set a target capacity of 7,200 Matiz units per month. And this is not targeted at the exports market, the entire production will be used for the domestic market.

That is more than doubling your turnover. How do you plan to achieve this?

First of all, now our focus is on increasing Matiz sales. In the next fiscal, we have targeted 80,000 units of Matiz on the roads, and 6,000 units of Cielo, Nexia and may be even Nubira. This itself will bring us closer to the target, the rest will be achieved through exports of auxillary parts. Besides, my plans to cut costs will also help in achieving this target.

What are your plans for the luxury sedan Nubira?

We are still working out the plan, we will probably launch it by November this year. Although the price has not been fixed, it will be somewhere between Rs 900,000 and Rs 1.1 million. Most likely, Nubira will create a new segment altogether.

You said the focus is going to be on Matiz this year. Is Cielo likely to be discontinued since it is not doing all that well in the market?

No, Cielo is not being discontinued, but we are planning a compressed natural gas version of Cielo in March. This am sure will improve Cielo sales. As of now, the CNG kit will be imported but will be fitted in by the company itself.

The kit costs about Rs 40,000, hence the price too will be hiked by around that much.

Although you claim international awards and acclaim for Matiz, it is still the Hyundai Santro which is doing well in the market and giving Zen a run for its money. Why?

If you compare all the three cars, you see that Matiz has more features and comfort than any other. Besides, you can't compare Matiz and Santro because the former is a 799cc car while the latter is a 900 cc car.

So do you think Matiz will race against Zen in the coming year?

The market itself is growing at a rapid rate now. Thankfully, the lull in the market is over, hence there will be place for all the players. I believe, Matiz will be the best selling car in the coming year.

How will the move by General Motors and Ford to acquire Daewoo, Korea, affect the Indian operations?

Well, as far I know, the Indian operation is also part of the acquisition deal. Both the companies have shown keen interest in the deal, and GM has even visited the Indian site. But the acquisition talks are still in the first stages, so we will have to wait and watch.

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