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Ssangyong to form JV for manufacturing base in China
Mahindra Group’s South Korean subsidiary, SsangYong Motor Company, has signed a letter of intent (LOI) with China’s Shaanxi Automobile Group for a joint venture that will establish local production plant for CBU (completely knocked down) vehicles as parts of its efforts to grow in the world’s largest automobile market.
Hyderabad: Mahindra Group’s South Korean subsidiary, SsangYong Motor Company, has signed a letter of intent (LOI) with China’s Shaanxi Automobile Group for a joint venture that will establish local production plant for CBU (completely knocked down) vehicles as parts of its efforts to grow in the world’s largest automobile market.
The joint venture, which will become Ssangyong’s first overseas production base in a 50:50 partnership with the Shaanxi Automobile Group, will construct production facilities for CBU vehicles and an engine plant on a site with an area of 1.23 million square metre in the Xi’an Economic and Technological Development Zone in Xi’an.
The first phase of the construction will establish a plant with an annual capacity of 150,000 units per year by the end of 2019 and the second phase will involve an expansion of the facilities to 300,000 units annually. “It is quite essential to have a local CBU plant in China to increase our competitiveness in the rapidly growing Chinese car market and to increase our sales volume,” Ssangyong Motor Chief Executive Officer Choi Johng-sik said in a statement on Wednesday.
“The joint venture, which will be Ssangyong’s first overseas production base, will serve as a new growth engine for Ssangyong as the company continues its efforts to become a strong global SUV manufacturer,” he added. Furthermore, Ssangyong, which manufactures trucks, buses, light commercial vehicles and pick-ups, will establish an automotive cluster with its major suppliers that will also enter the market, to ensure product competitiveness, and start the production of Ssangyong’s current models and models under development, in the second half of 2019, the company said.
