South Korean carmaker Ssangyong Motor and its parent company Mahindra & Mahindra (M&M) are in the final stages of deciding joint future vehicle platforms – a key to its turnaround strategy, Dr Pawan Goenka, M&M's President of Automotive and Farm Equipment Sectors, said on Tuesday.
“We don't expect it (Ssangyong) to turn profitable this year from the situation they were in, but expect good volume growth. Common platforms will be beneficial for both – our engineers have been working together for the last seven months. Right now is the time for investment and dealership enhancement,” he said.
“Our dependence on Western Europe has gone down. We're going into the Chinese market in a big way and are looking at large volumes from Russia and South America. June was the highest-ever month for exports.”
Increase in sales will also help Ssangyong use its full production capacity, which along with a reduction in raw material costs will help the company turn profitable.
The company, which makes SUVs such as the Korando and Rextin, has sold around 55,000 units in the first six months of the 2010 and hopes to end the year with sales of 1.20 lakh units.
“The biggest focus is on reducing raw material costs in alignment with Mahindra. For automakers, if raw material expenses are below 75-80 per cent of sales, the business is profitable, which is not the case right now,” Dr Goenka said.
M&M completed the Ssangyong acquisition in February this year for 522 million Korean won.