Auto Service World
Feature   December 1, 2000   by CARS Magazine

Daewoo future uncertain Courtesy cars decline in Canadian bodyshop survey

Korean industrial giant and the country's second largest carmaker, Daewoo, is in receivership, after talks with Ford and GM/Fiat failed to save the company from its creditors. Daewoo, struggling under...


Korean industrial giant and the country’s second largest carmaker, Daewoo, is in receivership, after talks with Ford and GM/Fiat failed to save the company from its creditors. Daewoo, struggling under a US$ 10 Billion debt, had hoped to avoid receivership, but failed to secure concessions from the firm’s labour unions. GM, (partnered with Fiat) Ford and Volkswagen are all in the hunt for parts of the Daewoo Motor empire, which has 12 plants in 11 countries and employs 53,000. The firm’s Korean plants employ 27,000, and global capacity is 2.15 million units. Serious overcapacity and Daewoo’s militant labour unions may prevent the buyout of Daewoo as a whole, and the Polish government is threatening a takeover of the company’s Polish plants if production is stopped.

Canadian bodyshops continue to replace their courtesy car fleets with rental units, according to a recent Gallup survey commissioned by Enterprise Rent-A-Car. 53 percent of survey respondents declared a change in replacement car practices over the last five years, with just over two-thirds moving to rental cars. The highest rate of change occurred in Atlantic Canada and Quebec. Those who switched cited lower costs, reduced hassles and paperwork and insurance considerations as major factors in the switch. Respondents who maintain their own fleets cite insurance, cost, and customer convenience as the most important considerations preventing the switch to rentals.


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