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Daewoo India hikes small car prices

Daewoo Motors India Ltd said it would increase the price of its small Matiz car models by Rs 6,000 to Rs 12,000 from mid-January.

"We have been holding our prices for a long time and this hike reflects the increase in our production cost," Young Chang Kim, Daewoo India's CEO said in a statement.

The devaluation of the rupee and the increase in input costs make the price increase inevitable, Kim said.

Daewoo's price increase follows similar recent revisions by some other Indian car firms.

Daewoo sells four types of the Matiz model priced at between Rs 300,000 and Rs 400,000, the statement said. It also sells the Nexia and the Cielo in the mid-size car segment.

It sold 50,900 cars in 2000, up 80.9 per cent from 28,140 units it sold in 1999, the statement added.

Daewoo India, 91.6 per cent held by Korea's ailing Daewoo Motor, said it would launch an aggressive marketing initiative beginning this month to improve sales.

The firm announced last month it had sought government approval to convert $82 million in debt owed to Daewoo Motor, Korea, into equity that would take its parent's stake in the Indian firm to 95.22 per cent.

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