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Mercedes-Benz dealers apply for Daewoo franchise

Daewoo Cars UK is considering more than 60 franchise applications, including some from Mercedes-Benz dealers in a contract termination period.

At the beginning of May the company announced it was abandoning its direct-only retail policy and was seeking to establish at least 40 franchised dealers who would work alongside its direct sales operations. The combined approach is meant to win Daewoo a 2.5% market share in the UK.

The strategy U-turn comes in the shadow of on-going buy-out negotiations between GM and Daewoo in South Korea. GM is expected to announce its intention to buy the bankrupt Daewoo in the next few days.

A Daewoo Cars UK spokesman: “We have had applications from about 66 dealers, some with existing franchises and some in a termination period, including a number of Mercedes-Benz dealers who were issued 12-month termination notices in December.

“The inquiries are still coming in. The parties interested range from those in the top 20 of the AM100, plus companies with between one and three outlets.”

He said the most important criteria in the selection process was commitment to the brand.

“The initial discussions we've had with dealer groups has highlighted their awareness of the high degree of consumer recognition Daewoo has. A lot of manufacturers lack that identity” the spokesman said.

Daewoo says it will begin interviewing applicants soon and expects to begin making the first franchise appointments in the late summer.

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