Indians Ready to Enter U.S. Market – Through South Korea

Mahindra using Ssangyong to access U.S. market.

by on Oct.11, 2016

Ssangyong plans to enter the U.S. with a smaller model in addition to something similar to the new Tivoli Air.

The sport-utility vehicle market is about to get a bit more crowded with a new model, and the new entry into the segment will mark the first product from an Indian automaker to reach the U.S.

More accurately, it will mark the debut of Ssangyong, the South Korean automaker owned by India’s Mahindra & Mahindra. Both have long targeted – and repeatedly delayed plans to enter – the American automotive market.

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Whether they’ll pull things off this time remains to be seen, but in an interview with trade magazine Automotive News, Ssangyong CEO Choi Johng-sik said the goal is to be here by 2020 with two small utes.

“America is very, very competitive,” he acknowledged, “so we need to build a good brand. That’s why we’re now preparing completely new products.”

Meaning “Double Dragon,” Ssangyong was part of a major Korean chaebol, or business group, nearly shattered by the East Asian economic meltdown of 1997. Like several other Korean carmakers, including the bigger Kia, it came close to complete failure. While Kia was taken over by Hyundai, the healthiest of the local automakers, Ssangyong landed in the hands of Mahindra & Mahindra, based in Mumbai, India.

Ssangyong originally launched as a bus manufacturer, but later added SUVs to its line-up, after a brief partnership with American Motors to build Jeeps.

(India’s Mahindra gets bargain on Pininfarina. Click Here for the story.)

One of India’s largest domestic automakers, it has long hoped to stake a presence in the U.S. It went as far as testing pickup and SUV models that it hoped to sell through a network of American dealers. But the project was scrubbed, Mahindra subsequently facing legal action from some of the franchisees it had signed up – posing problems for an entry under its own brand name.

Instead, it is turning to Ssangyong to make inroads.

According to CEO Choi, two crossover-utility vehicles will be available at launch, both offering all-wheel-drive options. These include the compact Korando – short for Korea-can-do – a nameplate that has been in the Ssangyong line-up since 1983.

(Click Here for a little more on Ssangyong’s new products.)

The other model will be an upgrade of the current Tivoli, a subcompact CUV that is already on sale in Europe, and generating strong sales.

Ssangyong also plans to develop two new engines for those utility vehicles, a 162 horsepower 1.5-liter four cylinder, as well as a 220 hp 2.0-liter package, according to Choi.

The outlet in Western Europe has buoyed the maker’s confidence it can finally build a global market. But the U.S. could be critical to Ssangyong’s long success. It has not turned a profit since 2001. Choi said he expects to at least break even this year.

(To get more details about Ssangyong’s push in to the U.S., Click Here.)

As for Mahindra, it continues to have global aspirations. It set up a U.S. engineering center near Detroit in 2014. And last December, the Indian company completed the fire sale purchase of Pininfarina. That legendary Italian design house designed such products as the Dino and Ferrari 458. Mahindra is expecting to continue Pininfarina’s design consulting business but also will use the new subsidiary to enhance the styling of its own product lines.

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