Why did Daewoo fail in India market?

Answer 1

Daewoo took a strategy of being the first to market with a large investment which failed due to unforseen political and economic conditions soon after their arrival.

Daewoo initially went into India as one of its "main targets" with the thinking that if Daewoo were the first to market they had a better chance of dominating the market. India had recently implemented measures to entice foreign investment and Daewoo wanted a piece of India's emerging market of close to a billion people. Daewoo accomplished their initial goal of being the first foreign company to the Indian market with a massive $1 billion dollar investment. They rolled out their Cielo sedan in July of 1995 and immediately the car began to sell due to strong demand.

This initial success brought out rosy projections for the carmaker which enticed competitors such as GM, Ford Motor Co., and PSA Peugeot Citroen SA. Soon afterward newly implemented economic reforms began to fail which caused consumer confidence to fall also. The result was Daewoo selling 17,000 of their Cielo sedans or half of their projections for the year. Their new plant in New Dehli operated at 1/3 of capacity. Other carmakers who entered the Indian market were not hit as hard as Daewoo had and were better prepared to weather the storm.