The Fall of Daewoo Motors

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR034 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges


Case Length : 13 Pages
Period : 1990 - 2001
Pub. Date : 2002
Teaching Note : Available
Organization : Daewoo Motors
Industry : Automobile & Automotive
Countries : South Korea


The case examines the problems faced by South Korea-based Daewoo Motors, the flagship company of the Daewoo Group. Daewoo Motors expanded rapidly in several risky and uncertain markets by taking huge debts. The company offered its products at low prices and with huge discounts, thus further increasing its losses. The case also discusses how financial mismanagement by Daewoo's promoters and the Southeast Asian Financial Crisis in 1997-98 ultimately led to the company's bankruptcy. In early 2000, the South Korean government invited bids for the sale of Daewoo Motors. After two years of negotiations, Daewoo Motors was finally acquired by the US automaker General Motors.


Study the role of culture, ethical standards and corporate governance practices in the survival and success of large, diversified companies


  Page No.
A Company in Trouble 1
Background Note 2
The Daewoo Motors Story 3
Problems at Daewoo Motors 4
The Future 7
Exhibits 9


South Korea, Daewoo Motors, Daewoo Group, huge debts, huge discounts, losses, financial mismanagement, Southeast Asian Financial Crisis, 1997-98, bankruptcy, 2000, two years, negotiations, US, automaker General Motors

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