Mahindra, SsangYong working on an electric SUV, launch likely in 3 years
Mahindra and SsangYong are working on a joint global platform that will spawn two models each for the firms and an electric SUV
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Mumbai: Mahindra and Mahindra Ltd and its South Korean unit SsangYong Motor Co. are working on a raft of new vehicle development programmes in a bid to strengthen their positions in the SUV market and meet stricter emission norms, said top executives of the two firms.
In the works is a joint global platform that will spawn two models each for Mahindra and SsangYong and an electric SUV. The South Korean automaker, which controls 25% share in the East Asian nation’s SUV market, envisages sales of 240,000 units (including exports) and revenue of six trillion Korean won (about Rs34,000 crore) by 2019. Among other things, it would be propped up by the launch of the new generation Rexton, its flagship SUV model, which will go on sale in South Korea next month, said chief executive and president Choi Johng-sik in a media interaction in Mumbai on Tuesday.
Mahindra acquired the troubled South Korean firm in 2011. Since then, SsangYong has seen a steady improvement in sales and launched several new models. In 2016, sales touched a record 155,000 units, which helped it turn in a profit of 28 billion Korean won—its first after nine years of continuous losses.
SsangYong is co-developing an electric SUV with Mahindra, which it plans to start selling by 2020, said Choi. “We are now very diligently cooperating with Mahindra to develop the new generation of electric vehicles,” he said. Automakers across the globe are collaborating to develop cars with cleaner technologies that run on alternative power trains as pressure to cut CO2 mounts.
SsangYong is working on various other projects with its Mumbai-based parent. Besides a new family of engines, they are developing a global SUV platform that will crank out four new models— two each for Mahindra and SsangYong, said Rajan Wadhera, president, automotive sector at Mahindra. It has already secured a licence from SsangYong to develop an SUV based on Tivoli, a premium SUV in SsangYong’s folio. The Mumbai-based firm, which has ceded market share in India’s competitive utility vehicle market to Japanese and South Korean rivals is hoping to recover some ground with new launches in the premium end of the SUV market. “We have learnt our lessons,” said Wadhera adding that the company is also studying the possibility of introducing the new generation Rexton in India.
The joint development work allows the companies to not only save cost but also reach out to new segments of the automotive market. “The joint development work on D platform, electric vehicle platform will further reinforce our portfolio and our desire to position SsangYong as a leading premium SUV maker,” said Choi.
Meanwhile, as part of its global expansion strategy, SsangYong is looking to set up a manufacturing facility in China along with a local partner to scale up volumes in the world’s biggest and fastest growing auto market. In October, it signed an initial agreement with China’s Shaanxi Automobile group. The agreement is likely to be finalized in the second half of this year.
“Mahindra needs global expertise to address the growing aspirations of Indian buyers. The collaborative approach with SsangYong will help the firm in recovering lost ground,” said Puneet Gupta, associate vice-president at I.H.S Markit, a sale forecasting and market research firm. SsangYong too will benefit from the Mahindra’s cost-efficient approach, he added.