NEW DELHI, April 13: Daewoo Motors India ltd is likely to turn red in 1997-98 due to poor sales, higher investment and increasing competition. ``We would make the same amount of losses in the second half of the fiscal as we made in the first half,'' Daewoo India managing director S G awasthi said.The company had made a net loss of Rs 10.73 crore in the first half of the financial year against a turnover of Rs 219.86 crore. Awasthi said this was the first time that Daewoo India, which entered the country in association with DCM group, would be recording losses.
In 1996-97, the company earned a profit of Rs 3.22 crore while it earned a profit of Rs 49.69 crore in 1995-96.
Daewoo India, which makes the Cielo luxury cars at its Surajpur plant in Uttar Pradesh, has so far invested Rs 2,700 crore and a large chunk of it was made in 1997-98. Awasthi, however, said sales in the first three months of the calendar year 1998 was around 3,000 cars primarily due the cut in the price of the Cielo car by over Rs 1lakh.
He said the small car, most likely to be named Matisse in India as well, will be launched as scheduled in September though pilot production would begin by July itself.
Daewoo's small car, exhibited for the first time at the auto expo here in January, is likely to be priced below the Rs 3 lakh mark to take on the stiff competition by the Maruti 800, Telco's Mint and Hyundai's Santro.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
