Ssangyong contemplates making India as manufacturing and export base
Modified On Jan 30, 2012 06:53 PM By Vidyadhar for Mahindra Ssangyong Rexton
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Seoul-based Ssangyong might shift their manufacturing and export base here in India. The motor company majorly owned by Mahindra & Mahindra wants to localize its products and earn benefits from the low cost of production. Ssangyong's decision to shift the manufacturing base here in India is driven by factors like Indian ownership, low manufacturing cost, synergies of joint development and manufacturing. The ownership factor might be driving the move. Ssangyong’s SUVs are well suited to the needs and wants of BRIC market, therefore it definitely makes sense to manufacture them in India, a low cost base in comparison to Korea.
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Auto giants like Hyundai are also exporting cars like Santro to many countries; Ssangyong mirroring similar move, is looking forward to explore such opportunities. The cars will be exported as Ssangyong brand. Although the manufacturing cost is lower in India, the quality of the products will not be compromised. The quality of the products will be of international standards. Ssangyong is set to launch its SUV’s Rexton and Korando C in India from its congregation plant in Chakan near Pune. Ssangyong with Mahindra could make a move to manufacture and export smaller compact and sub-compact SUVs. Both the companies are jointly developing a sub compact SUV (codenamed S101).
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This SUV will range between Rs 3 lakh-Rs 4 lakh and is likely to take on hatchbacks in India. The Ssangyong version of the same product is being considered to be manufactured and exported out of India. Mahindra is already into talks with Indian vendors for localizing some of the key parts of Rexton and Korando C to minimize the cost, also the vendors are participating in the development of S101. Ssangyong will invest $1.2 billion in its Korean operations and it would not include funds from Mahindra, which acquired Ssangyong last year. The company will invest the amount on its own over the next three to five years, which will help spin out four new products and their variants.
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