Daewoo Cars UK is believed to be close to deciding to change its policy of owned stores and seek a network of franchised dealers. A Daewoo spokesman would make no comment.

AM-online understands the driving force is General Motors which is in the process of acquiring a controlling stake in the South Korean manufacturer. GM is the only manufacturer in talks and is carrying out a detailed review of Daewoo's operations and finances before making a final decision.

In the UK, Daewoo has a number of sales outlets on prime sites close to strong brands.

Daewoo entered the UK market in 1995 and quickly created bitter resentment among franchised dealers by portraying them as sharks in an ad campaign.

Daewoo recently announced the closure of 32 of its 74 sales and service centres in England, Wales and Scotland.

Daewoo started with cars which were based on obsolete GM models. Heavy investment has improved the range which now includes the Tacuma MPV. Daewoo also absorbed the 4x4 models built by SsangYong which was a victim of the South Korean economic crisis of the late Nineties.

In Britain, Daewoo has kept sales on the move with imaginative marketing campaigns. Last year, Daewoo registrations in the UK totalled 34,692 (1.56% of the market, compared with 32,544 (1.48%) in 1999.

Alan Pulham, National Franchised Dealers Association director, said: "If Daewoo does decide to swtich to franchised dealers, I think that would be sensible and endorse everything we have always said.

"The quality of Daewoo's range has improved considerably since its arrival six years ago and I am certain some dealers would be interested.

"The franchise could be of great interest to some former Rover and Mitsubishi dealers in those part of the country where there is a demand for keenly-priced cars. I don't see the plcs being interested - Daewoo would be a franchise for smaller motor retail businesses."

##Daewoo showroom--left--Daewoo's showroom in Acton##