Businessweek Archives

Daewoo: Big Car On Campus?


News: Analysis & Commentary: AUTOS

DAEWOO: BIG CAR ON CAMPUS?

Daewoo pays college students to hype its cars in the U.S.

They're young. They're enthusiastic. And they're in for a tough time. They're the Daewoo Campus Advisers, an army of 2,000 college students hired to create a buzz among their classmates about cars never seen before in the U.S.

They're from Korea's Daewoo Motor Co. Daewoo has been aching to crack the U.S. market for years, but the closest it has come until now is building the Pontiac Lemans for General Motors in the early '90s. Now, on Sept. 1, it's taking the plunge on its own. Daewoo hopes to sell 30,000 vehicles in its first year, just under the number of Beetles Volkswagen plans to sell. Problem is, these are no Beetles. Or Toyota RAV4 sport-utes, or Honda Civic coupes, the "in" cars of the campus crowd. They are three conservatively styled sedans. "Gen-Xers are very aware of the image their cars project," says Wesley R. Brown, an analyst at market researcher Nextrend in Thousand Oaks, Calif. "Daewoo is not going to measure up."

So Daewoo is taking extreme measures. For starters, it's not franchising dealers but opening its own stores, as it has done in Britain. Daewoo will start with 15 outlets, mostly in California, Florida, and the Northeast. It aims to have 40 by the end of 1999 and will add dealers only in states where factory stores are illegal.

The Daewoo Campus Advisers, deployed at some 200 campuses this fall, will be talking up the cars, running Daewoo events, and directing hot prospects to the nearest Daewoo showroom. There, customers will find three aggressively priced models, from the $8,999 Lanos hatchback, to a Nubira compact around $12,000, to a loaded Leganza sedan at $18,600. The non-negotiable prices include roadside assistance and three years of maintenance. Says William D. Tucker, vice-president of marketing and customer relations for Daewoo Motor America Inc.: "We felt we had to come up with a way to approach the market that was totally unconventional."KOREA CALLING. That's where the student advisers fit in. They get a straight commission of $300 to $500 per car sold, depending on the model, and also receive an all-expense-paid seven-day junket to Korea. In September, each will get a car to use for three months free and the chance to buy it at a discount. "What they're doing is unique and exciting and a chance to earn some extra money," says David W. Clewett, a part-time MBA student at Loyola Marymount University in Los Angeles and a Campus Adviser. "It could make a good thesis project."

Daewoo hopes the undertaking turns out to be more than an academic exercise. With the Korean economy ailing, its car sales at home are off 69% through July. "We've got plenty of cars," Tucker quips. Its prospects are mixed, but Daewoo has little choice but to give it the old college try.By Larry Armstrong in Los Angeles


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus