DMIL, according to managing director S G Awasthi, is asking all its dealers to encourage customers to test drive various brands-including those of the competitors-before making up their mind. ``This is a reflection of the confidence we have in our products,'' says Awasthi.

DMIL is also banking on exports to open up the market further in India. The company will soon be exporting fully-built cars to Western Europe and DMIL hopes to capitalise on the export initiative to build a new image for its products in India. The idea: tell the Indian customer that the vehicles produced in India meet European standards.

In the case of the Matiz, for example, Daewoo has begun following just such a tack: the company has begun touting that the Matiz produced in India has the same features as those manufactured in Korea and other countries in terms of safety features and Euro norms.

According to DMIL, the mistakes can be traced right back to the beginning, when the company over-estimated the Indian market and invested about Rs 4,000 crore-the single largest foreign direct investment-in the country.With sales refusing to pick up, the huge capacity led to under-utilisation and also higher interest and depreciation costs: currently, DMIL uses only a third of its three lakh engine and gear-box manufacturing capacity. And that too, thanks to exports.

The second major error in judgment is now seen as the price reduction of the Cielo in December 1997. ``We did that to increase volumes to shore up capacity utilisation but it turned out to be a strategic mistake,'' accepts Kim. In one shot, the premium equity enjoyed by the Cielo vanished-and far from expanding volumes, the Cielo sales plummeted.

Finally, the Matiz which won accolades abroad, had a bumpy ride in the local market, till recently. In Korea, for example, the Matiz is the market leader with a 71 per cent market share in 1998-99, way ahead of Hyundai's Atoz (Santro's sister model) whose share is only 29 per cent.

``In Italy, it is the top selling small car despite being $1,200 costlier than Atoz,'' says DMIL deputy managing director corporate affairs and communication, Byung-Soh Min. ``The vehicle is also doing extremely well in UK and has just being adjudged the best small car by BBC.'' But then he also adds: ``India is the only country where the Matiz comes second to the Santro (Atoz).''

Sops like a two-year unlimited warranty plus the introduction of variants has resulted in a spurt of interest in the Matiz: the company has sold 3,000-plus cars for three consecutive months ie. September, October and November 1999, and is hoping to stabilise its monthly sales figure at 5,000. However, auto experts opine that it would be little to early to conclude that market perception has in fact undergone a change. Daewoo, it would appear, is still learning how to drive its image on Indian roads.