Fleet News

Daewoo hits back over residual scare stories

DAEWOO has denied allegations that it is turning away its own second hand cars due to massive oversupply of used models throughout its network. The Korean importer described an article suggesting Daewoo residual values were about to go into freefall in a trade newspaper as 'absolute rubbish'.

The article claimed Daewoo had refused to buy back a 25,000-mile M-registered Nexia from one of its readers because it was no longer taking cars for its used stocks. It further speculated that Daewoo's used values would plummet if the importer's policy of remarketing virtually 100% of its used stock was abandoned and thousands of second hand Daewoo's flooded the market.

A company spokesman said the importer had stopped buying cars from the trade during December, but denied its buy-back policy had been abandoned. He said the company had 4,500 used Daewoos in stock throughout the network - equivalent to three to four months worth of stock.

CAP Monitor editor Richard Whittles said: 'There would seem to be little doubt that Daewoo is supporting the price of its current used product above an open market level. The question therefore must be: will this continue? Daewoo has built a business strategy around straightforward and honest dealing and good value. It would follow that Daewoo itself would have the most to lose by withdrawing from its current strategy.'

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