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      A quick recap of what factors led to downfall of Daewoo Cielo

      CarTrade Editorial Team

      CarTrade Editorial Team

      In the Indian car market, there have been many occasions in which major foreign companies had ceased production after performing in their initial years. One such company was Daewoo Motors India, which was wholly owned subsidiary of Korean firm, Daewoo Motors. The company established its roots in the country after the liberalisation phase of the Indian economy. At that time, Maruti Suzuki used to be dominant force in the domestic car market riding on the success of M800 and Zen models. In the 1990's, a few international brands like Ford and Honda ventured into India under their alliance with local car makers. However, Daewoo chose its own route and began production of its premium sedan, Cielo at the Greater Noida facility.

      A quick recap of what factors led to downfall of Daewoo Cielo
      A quick recap of what factors led to downfall of Daewoo Cielo
       

      At that point of time, Maruti Suzuki Esteem was already on sale and many presumed that the car of Daewoo would not be able to outshine its counterpart. The car of Daewoo was powered by 1.5-litre petrol engine and had three versions namely Cielo, Cielo GLX and Cielo GLE. Since at that time cars did not had any premium features, Daewoo gave away a fully equipped car that had power windows and power steering. One of the major highlights of Daewoo was its aggressive marketing strategies due to which the company reaped huge benefits. A number of campaigns helped Daewoo to market its car properly, which resulted in Cielo clocking good bookings as soon as it was launched in July 1995.

      At that time, the dealers of Daewoo were less in numbers and the auto maker could not meet the rising demand. This created a huge backlog that created a negative impact on the minds of consumers in India as numerous cancellations were made. The company suffered at the hands of its own strategy after which the demand for Cielo subdued owing to these developments. The 4-cylinder 1498 cc petrol engine of Cielo gave away 73 bhp of power while attaining a peak torque of 127 Nm. The engine of the car was coupled to 5-speed manual transmission system to further transfer the power to its rear wheels. In terms of mileage, the car fared quite badly as the expenditure incurred on fuel was burdensome for many consumers. Since the demand for Cielo slipped further in a couple of years, the company decided to slash its prices, a move that backfired.

      It was reported that during the time period of April to December 1996, Daewoo sold 13776 Cielo's as against the target of 52000. Whereas in April 1997 to February 1998, the demand further stumbled at 9006 units, thereby registering a decline of 41 per cent from same period of previous year. The position of Cielo further worsened as in 1998 to 1999, the company sold 5500 unit, nearly half of what accounted in previous year.