I was told that it is the temp sensor. The car needs to be at 150 degrees. I am working on the same problem.
The overdrive has probably been unplugged on the transmission. Its a blue connector located on the transmission underneath the aircleaner. They are usually unplugged for a reason. If you plug it in and it runs bad, you have to replace the unit on the transmission.
Computer needs to see the button on the shifter so I would check the connections from this to the computer. If not then check fluid levels and then possibly have the fluid and filter changed. After that a mechanical linkage adjustment or internal issue.
The most common reason for this problem is the bad C0 clutch (located in overdrive unit under the side transmission cover. In Such case the transmission does not have to be pulled from the car. The Toyota issued the TSB about this problem.
The overdrive light blinks when the computer senses a transmission problem. (IE. Torque Converter failure) The reason it feels like it downshifts is due to the computer putting the transmission into a fail-safe mode to reduce further transmission damage.
One of the reasons a transmission might not shift into overdrive could be a problem with the belt drive inside the transmission. Belt drives can be stretched over time. Another reason could be that the transmission fluid is low or very old or the filter is clogged.
There is a reason thay said use Dextron II. And that is what you should use.
If it's a manual transmission, you'll be talking about putting an SM465 to replace an NV3500 or NV4500... I'd be doing the opposite swap, personally, as the SM465 is a direct drive transmission with no overdrive gear. It can be done.. you'd just have to use the NV bell housing, and you might have to replace driveshafts with ones fitted for the new setup.More the same with the automatic transmission... there's no reason to replace an overdrive 700R4 with a direct drive TH350.
Automatic transmissions today are very expensive to repair or replace. Each manufacturer has their own specificially formulated fluid for their transmission. Using any fluid that is not compatible may cause serious problems down the road. For that reason I highly recommend you use nothing but Toyota T-IV ATF and no substitute.
One of the reasons a Honda Accord with an automatic transmission may not shift out of first is there is not enough transmission fluid. The more likely reason is that the transmission has something broken in it and needs to be serviced or replaced.
i think the energy (fuel) is more consumed in automatic shifting of gears whereas the same is done manually.. this could only be the reason..
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If you didn't use dexron III transmission fluid, this may indicate the reason for the flashing light. Another reason is either too much or too little fluid. My best advice is to take the car to a transmission specialist. Really, changing the transmission fluid in a Daewoo is not something that should be attempted by anyone but a specialist.