Daewoo Cuts 75% of Dealer Plans

Daewoo Motor Co.’s nascent U.S. import arm has slashed by 75% the number of car dealerships it plans to open when it launches North American sales later this year, according to an industry publication.

South Korea-based Daewoo also has revamped its U.S. corporate structure in a bid to improve its operating efficiency.

The moves reflect Daewoo’s need to control costs in the face of the economic crisis that has swept through South Korea and left the government in control of some of the nation’s key businesses, including No. 2 car maker Kia Motors Corp.

Automotive News, an industry journal, reported that Daewoo has scuttled plans to start its U.S. operations with 80 factory-owned dealerships. Only about 20 will be up and running as the company launches its U.S. retailing effort, according to the publication.

Daewoo had planned to enter the U.S. market with four autonomous regional companies--a structure most other importers tried and abandoned decades ago. But a spokesman confirmed Tuesday that Daewoo scrapped that plan and now will consolidate its U.S. operations in a single company, Daewoo Motor America Inc., headquartered in Compton.

The new company will become the ninth Asian car maker to establish U.S. headquarters in Southern California.