I knew this was coming! Popular Indian automaker Mahindra & Mahindra’s (M&M) association with Ssangyong Motor Company (SMC) means that while India gets to see Ssangyong vehicles on roads, M&M will be seen going ahead with sales and manufacturing in Korea. The report in Business Standard that talked about this development of M&M planning to head to Korea also quoted Pawan Goenka, president (automotive and farm equipment divisions), M&M as saying “We are integrating operations with SMC, we have decided to develop all new platforms jointly with our Korean subsidiary. A new product based on a new platform will not be out till 2015. In the meantime, we have decided to bring Rexton to India and are now looking at assembling XUV500 in Korea.”
It was also reported it is still undecided what brand will be used to market Mahindra products in Korea. However, we expect these vehicles to retain the Mahindra badges as M&M did has decided to use Sangyong brand to market the products from Korea. The first of Ssangyong vehicles to come to us will be the Rexton, which would hit Indian roads by the end of 2012.M&M is investing as much as Rs 100 crore to come up with facilities to manufacture the Rexton at its plant in Chakan, Maharashtra. “We want to synergise our operations with that of Ssangyong in sourcing, manufacturing and distributing products to better profitability from resulting economies of scale. The purchase head at SMC is an expat from India and two-three resourcing deals are already underway,” added Goenka.
The report in Business Standard also read that the Indian manufacturer, who owns 70% stake in SMC, is working on two new platforms with the Korean utility vehicle maker. One of these is for Indian market while the other is for Korean market. M&M plans to use SMC’s well developed R&D capabilities for such operations.