SsangYong eyes expansion into passenger cars

RESCUED Korean brand SsangYong is full steam ahead in Australia, with its all-new Korando C compact SUV locked in for a December launch that will signal the start of a range shake-up that long-term could include vehicles built in India and even passenger cars and electric vehicles.

Korando production has already started in South Korea since Indian car-maker Mahindra stepped up to the plate to buy a controlling interest in the ailing SsangYong in August, providing an injection of funds to not only launch the long-awaited SUV but also kick-start stalled development of future models that are likely to include passenger cars for the first time.

Australian SsangYong importer Sime Darby is awaiting arrival of automatic transmission-equipped models before it launches the Korando – regarded as the marque’s first vehicle with true international appeal – with both six-speed manual and six-speed automatic transmission choices just before Christmas.

From top: Sime Darby managing director Rob Dommerson, SsangYong Actyon, SsangYong Rexton, Reva NXG EV.

The automatic transmission is being supplied by Australia’s Drive Systems International (DSI) which itself survived a near-death experience – triggered by the collapse of exports to SsangYong last year – before Chinese manufacturer Geely stepped in to buy the Albury-based company.

In the Korando, the auto transmission will be mated exclusively with a European-designed 2.0-litre 130kW/450Nm four-cylinder two-stage turbo diesel engine, in line with SsangYong’s all-diesel policy in Australia.

DSI is not only supplying SsangYong and Geely with transmissions, but also Mahindra – the company that is in the final stages of taking control of SsangYong, which was placed in administration in January 2009 at the height of the GFC.

Mahindra is expected to put at least two SsangYong models – the Rexton and Stavic SUVs – into production in India, potentially opening up a new source of right-hand-drive vehicles for the Australian market.

Sime Darby managing director Rob Dommerson told GoAuto that Mahindra’s bid for SsangYong – reported to be $500 million for a 51 per cent slice – could provide a major shot in the arm for the Korean brand in Australia.

“They (India) are a right-hand-drive market, so there’s an advantage for us with Mahindra doing SsangYongs as right-hand drive – it could be helpful for us,” he said.

“They have talked about that already – talked about making Rexton down there for their market and probably Stavic as well.

“Mahindra has also bought that electric vehicle company, Reva, as well, so it could be interesting.” Now called Mahindra Reva Electric Vehicle Co, the Indo-US EV maker is set to supply electric powertrain technology to Mahindra, and, potentially, SsangYong.

Mahindra is currently doing due diligence on its purchase of SsangYong, and the deal is expected to be sealed in October or November – just as Korando stock is being loaded on to the ship for Australia.

“We were very confident,” Mr Dommerson said. “That is why we have hung in there with SsangYong – it has got a future, especially in its engineering and product expertise.

“It is a worthwhile company to keep going in the marketplace. We have driven the new Korando, which is excellent. We have seen what they can do under pressure.” Mr Dommerson said that apart from Korando C, SsangYong’s product revitalisation would continue with refreshed Actyon ute and Kyron SUV ranges.

“They certainly have all the products line up, so I think you will see that happening fairly quickly,” he said, adding that might happen in the next year or so.

Mr Dommerson said passenger cars were a longer term goal for SsangYong, which until now has focused exclusively on SUVs and utes.

“They are talking to us about some passenger vehicles – they want to move into that area,” he said.

“But the real issue is who is going to buy them, who is going to be the new owners, and what product range do they have,” he said.

Mr Dommerson spelled out SsangYong’s plans for Australia to about 24 of the brand’s 30 dealers at a meeting in Sydney recently.

He said the company had lost about 10 dealers during the GFC when the future of the Korean brand was in doubt, especially when a factory strike stopped production last year.

“It has been a long journey from January 2009 to September 2010,” he said.

“We had a dealer conference last week, at Sydney Cricket Ground, where about 24 or 25 of our dealers turned up there, and we told them we are now committed to marketing and on TV and spending some serious money for SsangYong in an effort to get some momentum happening before the new vehicle (Korando) turns up.” The TV ads feature four of the existing five models in the line-up, which will grow to six with the arrival of Korando.

Sime Darby this week advertised for new dealers, seeking expressions of interest from retailers wishing to take on SsangYong, to fill gaps in its dealer network.

It also is planning to re-organise its own house, consolidating its Peugeot and SsangYong distribution franchises into one headquarters in the old Ford factory on Parramatta Rd in Homebush, in Sydney’s inner west.

The building was recently vacated by Australia’s other major independent importer, Ateco.

Mr Dommerson said the move to consolidate the two operations into a single building was being made for logistical reasons, as the existing operations were currently spread between Homebush – near the Sydney Olympic centre – and Mascot – near Sydney airport.

He said that when Sime Darby took on SsangYong in November 2008, it promised Peugeot staff seconded to SsangYong that the operations would be consolidated.

So far this year, SsangYong sales in Australia are up 21.7 per cent, although it is still averaging fewer than 100 units a month, giving it just 0.1 per cent share of the market.

Its top seller is the Actyon ute, which accounts for more than half of all SsangYong sales, with the 4x4 model dominating those volumes.

Of the remainder, only the Rexton SUV manages to make any real impact, making up about a quarter of SsangYong registrations.