India’s Mahindra to build SsangYong cars in China

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The Indian automaker Mahindra & Mahindra plans to first consolidate the position of its SsangYong brand in China and to expand overseas afterwards, a company’s executive told Reuters.

Over the past few years, one of the largest automakers in IndiaMahindra & Mahindra – started an expansion plan to regain some lost ground on its home market by taking over South Korea’s SsangYong Motor Company, the scooter unit of the French auto manufacturer PSA Peugeot Citroen. Also, the company recently finalized the acquisition of the design house Italian design house Pininfarina. However, the plan did not go according to Mahindra’s targets, as SsangYong is still losing money. The long-term target is to export the South Korean brand to the United States to boost its sales, but the Indian automaker is currently re-thinking its strategy. Mahindra’s Executive Director Pawan Goenka told Reuters that it was better to focus on China at this moment, to boost the demand in an existing market before going to the US to build a distribution network. He also revealed the company was in talks with some Chinese partners for a joint venture to make cars in the county.

China is easier to look at right now because Ssangyong already has a presence there. We have some traction and need to ramp up our products for local manufacturing,” Goenka said. “China is here and now, US is the future. We are still deciding what it takes for us to launch in the US.” Building cars in China would mean lower prices for Ssangyong, thus helping to kick off the demand. The brand sold around 2,460 cars last year, down from 11,976 in 2014. “Yes, right now China is down, but if we can get the right pricing then I think we should be able to benefit there,” he said.

Via Reuters