It is believed that Mr Awasthi did not agree to the management's plans to retrench 100-odd middle and senior level executives in the marketing department to prune costs.

The company's deputy managing director Byung-Soh Min is also going back to Korea next month.

"I am going back to my homeland, as I have been here for over four years and my term has come to an end", Mr Min told The Financial Express.

When contacted, Mr Awasthi refused to comment on the issue, adding "I have been here for a long time and was instrumental in establishing the joint venture between DCM Ltd and Daewoo Motors. I have accomplished my task of establishing the brand in India".

He said his resignation has not been accepted so far, but he has asked the Korean parent to relieve him of his duties by November 30, 2000.

He refused to divulge his future plans, but said he will not retire.Mr Awasthi has been with Daewoo Motors right from the inception of the company. The company, then known as DCM Daewoo Motors, was a joint venture between the DCM group and Daewoo. Mr Awasthi shifted to Daewoo Motors from DCM group, but continued with the company even after Daewoo took complete control of the company by raising its shareholding to over 92 per cent. He was designated chairman in January 2000.

Citing severe cost pressure on account of rupee devaluation, Daewoo Motors India Ltd (DMIL) has decided to reduce costs by cutting down on excess manpower.

DMIL plans to reduce costs by Rs 61 crore till March this year through downsizing workforce and other measures. The company announced recently that there would be a 15 per cent reduction in its office staff. It has a 2300-strong workforce. In addition, the number of Korean executives in the country is also being cut down as an attempt to "prune costs and right-size the organisation". The company's small car Matiz is also facing tremendous pressure from competition. Market experts pointed out that there were differences within the management over increasing the price of the car due to a rise in input costs.

Daewoo is studying the impact of manpower reduction on the cost structure and trying to minimise the hike in prices of its popular small car Matiz.The rupee impact has put a pressure of Rs 52 crore and component prices have gone up by Rs 5 crore. The manpower reduction, however, does not cover floor workers. The company is also reducing the number of divisions within the company from seven to five and the number of departments from 22 to 15. The number of Korean executives has come down to the current level of 11 from 46 in 1997.These efforts are as part of attempts to minimise the hike in car prices.