Ssangyong to Partner with Majority Owner SAIC on New SUV Plant for China

7 November 2005

Ssangyong’s Kyron mid-size SUV

An automaker is looking to boost production of SUVs while cutting its costs in order to stop the red ink flowing from its balance sheet. GM? No, Ssangyong, the fourth-largest Korean automaker (specializing in SUVs and large sedans) now owned 50.9% by China’s SAIC.

Ssangyong’s S-100 plan calls for a new plant in China by the end of 2007 to produce sports utility vehicles, and is part of a promised US$1-billion investment promised late last year when Shanghai Automotive Industry Co (SAIC) took the firm over.

Ssangyong, which sacked its CEO over the weekend, posted a 68.5 billion won (US$65.3 million) operating loss in the first six months to June, compared with a 41 billion won (US$39.1 million) net profit a year earlier.

The company did report, however, an 18.4 billion won (US$17.52 million) net profit in the third quarter, after the losses in the two previous quarters.

Ssangyong is planning a series of new vehicles, including the Kyron, offered with a 2.0-liter turbodiesel as well as a 2.7-liter diesel and a 3.2-liter gasoline engine. The 2.0-liter diesel offers estimated fuel consumption of 7.0 liters per 100 kilometers on the highway (approximately 33.6 mpg US). The company expects the 2.0-liter Kyron, which was announced earlier this year and will be in showrooms in 2006, to become its volume seller in Australasia.

Another newly announced compact SUV, the Actyon, also uses the 2.0-liter engine, which was developed by Ssangyong.

At the time of its acquisition by SAIC, Ssangyong’s then-CEO Jin-kwan Soh stated that his company will concentrate on developing “environmentally friendly engines”, with a diesel-hybrid engine possible. (Earlier post.)