Pawan Goenka believes that the Tivoli launched here on Tuesday is as significant as the Scorpio was over a decade ago.
According to Mahindra & Mahindra’s Executive Director, the compact SUV from SsangYong Motor has the potential to be a game changer akin to the Scorpio at the time of its India debut in 2001. At that point in time, M&M had earmarked substantial investments for the project and its success was, therefore, imperative.
Goenka, who was the key architect of the Scorpio, is now hoping for an encore with the Tivoli, the first product from SsangYong since the time it was acquired by M&M four years ago. As Chairman of SsangYong, he is naturally keen that the Tivoli paves the way for the Korean automaker’s comeback in the SUV space. “Tivoli is to SsangYong was Scorpio was to M&M at the time of its launch,” Goenka says.
This compact SUV has the potential to do good numbers and the current projections are 10,000 units each month. In the process, it will help scale up the company’s annual volumes to at least 2.5 lakh units which will help generate investments for future products.
SsangYong wrapped up 2014 with sales of 1.42 lakh vehicles despite loss of volumes in Russia which is in the midst of a severe economic crisis following the sanctions imposed by the West. As a result, the company will focus on China where good numbers could even lead to a local assembly operation by the end of this decade. For this to happen though, SsangYong will have to optimise capacity of 2.5 lakh units annually back home and it is here that the Tivoli will be a key catalyst.
Things are expected to gather momentum when the diesel version makes its debut in June and, till that time, the four petrol options will have to do their bit in wooing customers. Hopefully, if everything goes according to plan, the Tivoli can clock good volumes in key overseas markets like China and Europe. SsangYong will then, in all likelihood, make its next big entry into the US market by 2017 for which feasibility studies are underway.
Back home in South Korea, the company’s largest selling product is the Korando Sports which averages about 30,000 units annually and used by customers who are in the 40 plus age group. The Korando C is for younger end-users (30-40 years) and clocks 20,000 units in South Korea each year. The Tivoli is intended for customers in the 25-35 (years) age category and is, therefore, banking on youth power to be its biggest growth driver.
Dealers also believe that the big numbers will start once the diesel version hits the market six months down the line. Women account for 30 per cent of SsangYong buyers in South Korea and this component could increase with the Tivoli. Interestingly, 40 per cent of the company’s potential customers visit the showrooms to buy their vehicles while salesmen made door-to-door pitches for the balance 60 per cent business.
SsangYong was a formidable name to reckon with in SUVs two decades ago before it began losing its way and a series of ownership changes did little to arrest its downfall. Today, it is a lot more upbeat with M&M in the driver’s seat and is planning to launch a slew of products in the coming years. Its dealers will now have to do their bit in telling customers that things are back on track given the image beating the company has taken over the years.
The writer is in Seoul on the invitation of Mahindra & Mahindra