Ssangyong to make cars in China

SEOUL — Ssangyong Motor Co. plans to build a factory in China, the company says.

The automaker’s strategy calls for up to 10 models in China in five to seven years.

Ssangyong is owned by Shanghai Automotive Industry Corp. and produces primarily SUVs. SAIC bought Ssangyong out of bankruptcy in 2004.

Last year Ssangyong posted a net loss of 196 billion won ($210 million).

The companies plan to develop vehicles jointly at centers in South Korea, England and China in a push to sell more Ssangyong vehicles worldwide. All
vehicles would be Ssangyong-badged. Shanghai Automotive’s focus will remain on China.

“SAIC is not pursuing exports at this time,” said Phil Murtaugh, Ssangyong’s representative director. Murtaugh is also executive vice president for overseas operations at SAIC.

The timetable for the plant in China is uncertain. Murtaugh would say only that he expects to have Chinese government approval to build a factory in Nanjing “long before” 2011.

All 2,000 Ssangyongs sold in China last year were imported from Korea. Until the China factory is up and running, Ssangyong’s factory in Pyeongtaek, South Korea, will produce more vehicles to meet demand.

The Korean factory has annual capacity of 300,000 units. Ssangyong sold 121,196 units worldwide last year, so Korea has capacity for more sales in China.

The expansion plan was laid out March 21 at a press conference in Seoul. The plan is part of a larger strategy to triple Ssangyong’s combined global sales by 2011 while entering markets in South America and Asia.

The company would build models for five passenger-car segments and update its four SUV segments on five new vehicle platforms. It is planning up to 30 models worldwide, all within five to seven years.

The plan is also designed to turn around Ssangyong’s finances. Wages at the company have been frozen for two years.

“Ssangyong has gone through a very difficult time the last two years,” Murtaugh said.

To cut costs, SAIC and Ssangyong will share technology and product development.

Ssangyong has diesel technology that SAIC lacks, while SAIC has gasoline engine technology for Ssangyong. Development plans call for two diesel engines plus two four-cylinder gasoline engines and a V-6 gasoline engine.

March 31, 2007 | Automotive News China (now defunct)