The Forgotten Daewoo Cars in India | Matiz, Cielo and Nexia

There was a time when Daewoo Motors was quite famous and active in India. They were giving decent performance and were impressing the customers. But the inability to read the market properly, poor performance and lack of proper marketing strategy led to the company’s downfall just seven years after its first launch in 1995. Over this time span, the company introduced some cars which offered amazing design and performance.

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Let’s have a look at some of the iconic forgotten Daewoo cars that could have made it big but failed to do so.

1. Daewoo Cielo | The OG luxury sedan of India?
   

   

   Daewoo entered the Indian market with Cielo in 1995. The car had a starting price of Rs.5.46 lakhs and introduced a lot of new features in the market. It was powered by a 1.4Litre engine that delivered 71hp and a peak torque of 128Nm and offered a fuel efficiency of 13.4km. This was one of the first cars in India that came with fuel injection and a three-speed automatic transmission. It offered tough competition to the likes of the famous Maruti Esteem.

   But the response from customers didn’t turn out to be what the company had expected. Instead, it was totally the opposite. Within a few months of its release, more than 70000 consumers had cancelled their booking of Cielo and the actual sales were only 50% of what the company had expected. Unfortunately, Cielo turned out to be a major failure for the company and they had to stop its sales in 1999.

   The reason for the mass booking cancellation is unknown but it was the first nail in the coffin of Daewoo.

2. Daewoo Nexia | Another failed attempt
   

   

   The Daewoo Nexia was launched in 1999 and was basically a powerful version of Daewoo Cielo. This sedan was powered by a 1.5 Litre engine that delivered 93 Hp and a peak torque of 132 Nm. The car had a classy look and a starting price of Rs.6.22 Lakhs. Nexia came in both automatic and manual transmission and could go anywhere around 13Km with one litre of fuel.

   Nexia did get a lukewarm response from the customers because of its unique design but couldn’t stand in the market for long and was discontinued when the company retired from Indian in 2002.

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3. Daewoo Matiz | The Unsung marvel in the segment
   

   

This small hatchback was launched in 1998 and was the most famous offering from the company to the Indian audience. Matiz gave a good performance with its 796cc engine that churned 52hp and peak torque of 71 Nm. It also had a good fuel efficiency offering 18.5 kmpl. Also, this car was very spacious and offered a much needed comfortable ride to the occupants.

But due to poor service from the company and tough competition from the already established cars like Maruti 800 and Hyundai Santro, the Matiz could never really hit it off and was discontinued in 2000. With a little more planning from the company, Matiz could have done much better and would have been a huge success. In 2002 General motors bought the Daewoo and again introduced Matiz in India in the form of Chevrolet Spark.

There’s no doubt that Daewoo had great potential and could have been a major success in the Indian market. Let’s have a look at why did it fail to impress the buyers in India?

What really went wrong with Daewoo cars in India?

1. Lack of good promotions in India

   The company did a really bad job with its promotions. Initially, they placed their vehicle in the premier segment and then at the same time started offering unheard discounts on their rides. The consumers got really confused because of this and they failed to understand the company’s place in the market. Due to average performance, it’s cars failed to stand at the premier segment and also due to the high price it failed to justify its place in the middle segment. Due to this, they couldn’t find many buyers in the market and it really affected their sales in India. 

2. Comparatively high price In the market
   

   Initially, the company introduced its cars as a premier product and hence priced it above the competitors. But the Indian buyers couldn’t find a reason to spend so much on the Daewoo rides as there were many cheaper options available in the market at that time. Hence buyers didn’t want to spend so much on this brand.

3. Huge losses in the Indian market

   By placing their rides in the premier category Daewoo motors had kept their prices high in the Indian market. But when things started to fall off for Daewoo motors they started offering huge discounts on their rides. These price cuts were very drastic and resulted in a major downfall for the company. The company saw a loss of over Rs 351.4 million in 1998 and its sales decreased to Rs 1.22 billion compared to Rs. 2.7 billion in the previous year. The Indian market was proving to be a major downfall for the company.

4. Other reasons for its failures
   

   Daewoo had a strong brand portfolio, huge technology potential, and state of the art manufacturing plants but the company fell in huge debt due to constant price cuts. They tried to expand too aggressively in this price-sensitive market without understanding it first and it landed them nowhere. It is also reported that the company staff was given no proper training at sales and they offered a poor service to the customers. Also, a lack of proper marketing strategy and tough competition from the well-established companies like Maruti and Hyundai resulted in a major downfall for the company. Daewoo was termed as too ambitious and unrealistic’ by the analysts at their attempt to enter the Indian market.

   Had Daewoo done more research on the Indian market and offered reasonable prices it could have found success. Do you agree with us or not? Let us know in the comment section.

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