Ssangyong Motor may produce vehicles in China
Ssangyong Motor Co., the Korean SUV maker, is exploring a joint venture in China with Shaanxi Automobile Group Co. to produce vehicles in that market.
Ssangyong signed a letter of intent with Shaanxi Auto on Wednesday to study a possible joint venture and a local assembly plant, the Pyeongtaek, South Korea-based automaker said in a statement.
Shaanxi Auto, set up in 1968, produces heavy and special-purpose trucks, including military trucks under the Yanan nameplate. Xi'an, where the automaker is based, is famous for being the site of the life-size terra-cotta warriors from the Qin dynasty in the third century B.C.
"The joint venture, which will be SsangYong's first overseas production base, will serve as a new growth engine," Ssangyong Motor CEO Choi Johng-sik said in the statement. He called the plant "quite essential" to increasing sales and competitiveness in China's car market.
Ssangyong Motor is looking to markets such as the United States and China to make up for an expected decline in shipments to the United Kingdom following the Brexit referendum, CFO Vasudev Tumbe said in August.
Ssangyong's corporate parent, Indian automaker Mahindra & Mahindra, also is seeking a joint venture partner in China for its electric vehicle division. They would be among the last of major global automakers to build factories in China, which imposes hefty duties on imported vehicles.
The planned foray into China comes at a time when the central government said it will not in principle allow new automakers to set up production if they produce vehicles that run on gasoline or diesel. The country is encouraging the development of EVs to reduce its dependence on imported oil.
A Ssangyong Motor spokesman said it was too early to comment on specific model plans, but the company will have a plan in line with the Chinese government's policy.
China's SAIC Motor Corp. bought a 49 percent stake in Ssangyong for $500 million (3.3 billion yuan at current exchange rates) in 2004 before it was taken over by Mahindra & Mahindra after Ssangyong's bankruptcy.
Shaanxi Auto, set up in 1968, produces heavy and special-purpose trucks, including military trucks under the Yanan nameplate. Xi'an, where the automaker is based, is famous for being the site of the life-size terra-cotta warriors from the Qin dynasty in the third century B.C.
"The joint venture, which will be SsangYong's first overseas production base, will serve as a new growth engine," Ssangyong Motor CEO Choi Johng-sik said in the statement. He called the plant "quite essential" to increasing sales and competitiveness in China's car market.
Ssangyong Motor is looking to markets such as the United States and China to make up for an expected decline in shipments to the United Kingdom following the Brexit referendum, CFO Vasudev Tumbe said in August.
Ssangyong's corporate parent, Indian automaker Mahindra & Mahindra, also is seeking a joint venture partner in China for its electric vehicle division. They would be among the last of major global automakers to build factories in China, which imposes hefty duties on imported vehicles.
The planned foray into China comes at a time when the central government said it will not in principle allow new automakers to set up production if they produce vehicles that run on gasoline or diesel. The country is encouraging the development of EVs to reduce its dependence on imported oil.
A Ssangyong Motor spokesman said it was too early to comment on specific model plans, but the company will have a plan in line with the Chinese government's policy.
China's SAIC Motor Corp. bought a 49 percent stake in Ssangyong for $500 million (3.3 billion yuan at current exchange rates) in 2004 before it was taken over by Mahindra & Mahindra after Ssangyong's bankruptcy.
