Monday 13th June 2016
SSANGYONG TAKES AIM AT LAND ROVER
"I suffered the situation, it was really stressful; it was about my life," says Indong Song, a leader for trim assembly on Assembly Line One atSsangYong factory at Pyeongtaek in South Korea.
"We had 5,000 staff, but there were over 100,000 people related to and depending on the company. This was the challenge, but it was very, very important to carry on," says Johng-Sik Choi, SsangYong president and chief executive.
Both men are talking about the dire situation at South Korea's fourth-biggest car maker in 2009/10. “Dire” is not unknown at SsangYong, which in its 62-year history has shown an unerring instinct for getting hitched to the most unsuitable partners, whether that's SAIC, the Chinese car company, or Daewoo the doomed Korean conglomerate.
But even by its own impressive standards, 2009 was a terrible time for SsangYong. After posting a $75.42 million loss, and losing 77 days of production due to industrial unrest, the company was in receivership protected from its creditors, with only a cobbled-together debt-for-equity deal with its decimated dealer body allowing it to remain on financial life support while a buyer was sought.
And with four major bids on the table, it was Indian industrial group and car maker, Mahindra and Mahindra, which for 522.5 billion Won, purchased a 70 per cent stake SsangYong in 2011 - since upped to 73 per cent.
Into the middle of all this, was plunged president Choi, a former senior executive at Hyundai with his critical mission to repair the company. "It was risky, yes," he says, "but there's also the other side of the dream; hope."
SsangYong never been a rich company, but five years of majority shareholdership by SAIC had bled it dry. The Chinese car maker has since been charged with technology theft by the Korean public prosecutor's office specifically pertaining to SsangYong hybrid expertise, which was partly funded by the Korean government (SAIC denies this).
"We should have launched the Korando in 2009,” says one manager. “It put everything back at least three years."
Although there was that ill-advised dalliance with Panther Westwinds in the Eighties, most UK car buyers probably had their first introduction to SsangYong (the name means double dragon) in 1994 with the Musso (aka the rhinoceros), a strange looking but tough and weirdly compelling Mercedes engined 4x4; some of them are still out there.
If you thought the Musso visually challenged, the Rexton and Actyon 4x4s, and Rodius MPV were just as weird as their names. The Mahindra brothers have proved a steadying hand, however, and the Korando mark III, a mid-sized 4x4 launched in 2011, was easier on the eye and debuted SsangYong first monocoque chassis.
Subsequent models, such as the Turismo, is a hugely improved Rodius, similarly the Korando Sports pickup and Rexton W were far better than their forebears.
It was last year's Tivoli, however, which attracted most attention and persuaded a lot of sceptics that things were changing at the double dragons. This pretty B-segment SUV/crossover is ahead of the curve of this burgeoning small-car sector with its Euro 6-compliant, 1.6-litre turbodiesel, 1.6 petrol and two- and four-wheel drive, with eye-popping low prices that start at £12,950 rising to £18,250 for a top-spec 4x4 diesel. This year we've seen the launch of the XLV, an extended/estate version of the Tivoli with up to 720 litres of load volume.
In Britain, thanks to a nimble marketing of the existing range and early supplies of Tivoli by the importer, year-on-year sales doubled last year to 3,600.
"I've always known it would come good," says Paul Williams, chief executive and founder of SsangYong Motor UK. Formerly of Daihatsu and then Kia, Williams set up the UK importer in 2007 and has been through, as he puts it: "some hair-on-fire years since."
In the last couple of years, however, Williams and his team, which includes the astute former Chrysler UK marketing boss, Steve Gray, have targeted discreet markets with a blend of old-school, go-anywhere appeal, good specifications, excellent towing capacities and low prices with a five-year unlimited mileage warranty.
While the collapse of Russian and South American markets together with a downturn in China has meant that SsangYong produced barely half of its promised 300,000 vehicles last year, you can tell the wind is in its sales. The Mahindra brothers have put in almost $1 billion including the purchase price and building a brand-new Korean engine plant. There are new 1.5- and 2.0-litre direct-injection turbo petrol engines on the way, as well as funding for projects such as autonomous driving (vehicles are already being tested) and an ingenious 249-mile-range, plug-in hybrid with a 650cc range-extender engine and a 43kWh LG Chem lithium-ion battery pack.
Although sales have been pegged at about 144,000 for the last three years and the company is still losing money, earnings before interest, tax, depreciation and amortisation is 2.6 per cent of last year's $3,390 million sales revenue and R&D spend was $166 million. And, while Choi says that home sales in Korea are "saturated," SsangYong Korean sales last year were up from 69,036 in 2014 to 99,664.
Choi is soft spoken and thoughtful, but you can't help but catch the enthusiasm in his voice as he outlines his strategy to get SsangYong land-locked Pyeongtaek plant up to its capacity of 240,000 units a year, reduce the number of chassis platforms down to two, plus possibly a bigger D-segment monocoque to underpin a range of soft-roaders to battle with the Hyundai Santa Fe.
He wants to export the pickup to the US where medium-sized utes like the Korando Sport can make good money, and potentially hike SsangYong annual production up to half a million. He reckons on building about 100,000 models off the Rexton and Korando Sport pickup chassis, and up to 200,000 off the Tivoli/Korando monocoque shell.
While SsangYong is actively seeking a Chinese partner (presumably not SAIC), Choi says he is also seeking partners in those countries where Korea doesn't have a free-trade agreement, which might include Brazil. "We could be reaching 500,000 a year," he says, "the market potential is there."
A measure of the company’s new-found confidence can be seen in the pipeline full of new models. This September at the Paris motor show we'll see next year's all-new Rexton as a barely disguised concept. It's a handsome, large SUV for people who need to carry up to seven people and tow up to 3.5 tonnes. It'll be powered by a 2.2-litre, four-cylinder turbodiesel, with switchable 4x4 and a set of low ratios. We saw the interior, too, which is a big step-beyond that previously offered by SsangYong and a shot across the bows of the competition, especially when you consider that a top-spec Rexton will cost about £35,000.
"It's for people who want to do what the old Rangey used to do, but without 100 grand," says Williams.
There'll be a pickup version (the Korando Sport name will be changed), with a choice of 3.1- or 3.2-metre load beds coming in 2018, and in 2019 will be the all-new Korando. We were shown three studies for this car in the design studio and asked to chose one, though there was really only one choice; a clean, strong and original style that could stand alongside any of the German SUVs. While Choi says he will use the Pininfarina name as a badge of authenticity of design, frankly on the evidence of these in-house efforts, he shouldn't need to.
Then there is the XAV Concept, first shown in Frankfurt last year, this charming study has a space-age lower half, with a utilitarian glassy cabin, which is something of a SsangYong speciality since Brit Ken Greenley designed the first Musso. It's a compelling vision of what a new-utilitarian style could be and seems like a direct challenge for Land Rover, which is floundering with its Defender replacement. XAV would also be a stand-out halo car for SsangYong. So will it be made?
“We are considering a sort of [Range Rover] Evoke or [Jeep] Renegade possibly developed off this model," said Soo-Won Lee, head of the R&D centre.
Choi agrees that the XAV could be done, but if he includes some of the new hybrid or electric technology he is thinking of, it won't be ready for three years. Later at supper he changes his mind and says that it could be on the market in as little as two years.
SsangYong is open about its desire to be a sort of South Korean Land Rover and its plans would place it in direct competition - at present it produces about half the cars of the Indian owned 4x4 maker.
Perhaps it is time we took SsangYong more seriously, because the Tivoli proves that it isn't just all fine words.
So watch out Land Rover, SsangYong has designs on your patch.