Daewoo Motor Sales, the marketing arm of bankrupt Daewoo Motor Co, has reported net profit for the first half-year down 71%.
The massive drop - first-half sales fell to US $1.65 trillion from US $2.6 trillion last year - has been blamed on plummeting vehicle sales and lower commission fees.
The long-running take-over talks between US car maker General Motors and Daewoo Motor, which went bankrupt last November, may not be concluded until the autumn because GM has yet to agree a price for the Korean car maker. A Daewoo spokesman for UK subsidiary Daewoo Cars, said: "Daewoo Motor's half year financial results are obviously a disappointment, but shouldn't be taken in isolation. Daewoo Motor is experiencing the combined effects of a very competitive global car market, the first signs of a possible downturn in the economy in some markets and the restructuring of Daewoo Motor's operations in Korea.
"The last 12 months have been difficult for Daewoo Motor, but the fact that for three consecutive months of 2001 the company has made a profit for the first time in nearly three years demonstrates that the programme of restructuring agreed with creditors and the Korean Government has worked and the company is well equipped to go forward.
"In the UK, Daewoo Cars is preparing for 2002, which will be one of the most pivotal in the company's history as franchised dealers are recruited - the first of which will be signed up imminently - important new models go on sale, and an aggressive marketing strategy to increase market share is implemented."
The glimmer of good news has grown stronger. Daewoo Motor has now posted its fourth consecutive month of profits before interest and taxes, boosting creditor hopes of a sale.
Daewoo had operating profits of 13.2bn won ($10.3m) in July on sales of 456.2bn won it said today. "We have posted operating profits for four consecutive months. Our restructuring efforts are beginning to pay off," said a Daewoo Motor spokesman.