Why is South Korean Ssangyong Motors not sold in US?
Ssangyong Motors, a car brand not very popular even in South Korea, has already had a "life experience" of ups and downs. Glitter and loneliness are staged alternately, but a car of this brand that meets local regulations has not yet been sold in US. The importance of US market is obvious. What is reason for crossing Atlantic Ocean to flex your muscles in US market? Let's talk about it today.
Ssangyong Motors was established in 1954 by South Korean company Hadong Hwan Motors. Initially partnered with American company Willys to produce first batch of military off-road vehicles in South Korea. Engaged in technical cooperation, became a world leader in diesel technology and became one of first listed companies in Korea. In 1988, it was acquired by Ssangyong Group and changed its current name. In 1991, Ssangyong and Daimler-Benz formed a technical alliance to produce small cars and carry out technical research and development of diesel engines, and developed third generation common-rail diesel engine with direct fuel injection, using advanced engine technologies such as variable cross-section turbochargers . In 1997, South Korean Daewoo Motors acquired Ssangyong but soon sold Ssangyong in 2000 due to financial problems.
In 2004, Shanghai Automotive Industry Group acquired a 49% stake in Ssangyong, and a year later increased its stake to 51.33%, officially becoming Ssangyong's largest shareholder. In 4x4 SUV and high-end sedans market. The main SUV products include Lester series, Xiangyu, Acton, Musso, sedan chairman, MPB Ludi model, etc. Ssangyong has become most professional SUV manufacturer in world, along with Jeep and Land Rover, one of enterprises.
However, good times did not last long: in 2008, global financial crisis broke out, and world oil price soared, which led to a serious drop in sales of SUVs and minivans with high fuel consumption in international market. market. The main products of Ssangyong are concentrated here. The result is imaginable. Ultimately, on verge of bankruptcy. In April 2009, Ssangyong Automobile trade union entered into a violent conflict with South Korean police and entered into recovery (bankruptcy) proceedings. In same year, Shanghai Automotive Industry (Group) Corporation announced that it was giving up its rights and interests in Ssangyong automobile company. However, due to numerous conflicts between labor and capital, coupled with a severe drop in sales, Ssangyong blamed SAIC for taking over - SAIC stole Ssangyong technology - this is face of some Koreans. In this regard, cooperation between Hyundai and JAC has a similar situation. At that time, Hyundai also accused JAC of stealing its technology, but JAC has its own physical products, including sedans and minivans, and sales have been good.
The strength of Korean people's support for their independent brands is unparalleled in other countries. In organizing a company, strength of union is extremely strong. Of course, when GM bought South Korea's Daewoo Motors, it also faced same problem, but Koreans are very jealous of powerful GM and more powerful United States behind it; GM and United States have a huge disparity in power, which has also led Koreans to have different views of China and United States. If China and SAIC had same power as United States and GM at beginning, perhaps attitude of the Korean unions towards SAIC it would be different.
Let's get back to business. Ssangyong Motors is going back and forth to different buyers, which is doomed to lose voting rights and weaken its brand. Indian automaker Mahindra Group is also working to make brand profitable after taking a 70% stake in Ssangyong Motors, which was on verge of bankruptcy in 2011, but so far Ssangyong has not escaped curse of losses. In addition, in recent years, Ssangyong's largest export market, Russian car market, has been sluggish in recent years, Ssangyong's export volume has fallen sharply, and Korean domestic market is light and extremely limited, so Ssangyong is inevitably expanding to other countries. foreign markets.
The United States is a partner country of Korean Free Trade Agreement and only country that Ssangyong Motors is not a part of. The reason is that due to specifications and product quality, Ssangyong's plan to enter US market has been repeatedly delayed. Pawan Goenka, chief executive of Mahindra and chairman of Ssangyong Motors, once stated bluntly in an interview with media, "Ssangyong still hasn't sold a car that complies with local regulations in United States." In fact, Mahindra tried to export its Indian-made pickup trucks to United States as early as 2010, but negotiations with American distributors fell through at last minute, and she was also involved in several years of lawsuits. The defeat undoubtedly left a big mark. shadow on Mahindra. However, Mahindra did not give up on this. In 2014, she opened a technical center in Michigan, USA. In same year, Mahindra also began to explore possibility of selling SsangYong vehicles in US market. In 2015, Mahindra was acquired by renowned automotive design company Pininfarina. Now Mahindra is trying to open an outlet to United States with Ssangyong.
For Ssangyong to turn losses into profits, it needs to expand globally. Both Chinese and American markets are included in Ssangyong's plan, and last year Ssangyong "married" domestic Shaanxi Automobile, and Goenka also said, "At moment, Chinese market is easier to master, and Ssangyong already has a certain foundation here. We have already undertaken some action in Chinese market, and we only need to implement localized production and upgrade our product line. The Chinese market is our present, and US market is our future. We must build on present, and if we enter, United States will have to think that it can bring us.”
But this does not apply to US market. Goenka said, "The US market is not something you can just walk into. You have to invest a lot of money in product and brand development. Given that we have a lot of priorities at moment, joining US program has been delayed but not terminated."
Today, Ssangyong Motors is already preparing to enter US market. Ssangyong Motors President Cui Zhongzhi said that while Ssangyong is trying to start production in China, it also plans to use new company name to enter US market soon. 2019 or 2020. No specific schedule yet. Ssangyong takes several years to prepare, and in order to implement plan, Ssangyong is also investing heavily in research and development of new models.
There is no doubt that gaining a share in mature and highly competitive US market is not easy. While SUVs and crossovers are very popular in United States at this stage, Ssangyong SUVs won't arrive in United States until 2020. a repeat of same Fail of parent company Mahindra. And what awaits us in future, we will wait and see.