SsangYong to launch China-made Kyron SUVs

Shanghai, March 28 (Gasgoo.com) South Korea’s SsangYong Auto Group is to begin building its Kyron sport utility vehicle (SUV) in China, tailored for local market requirements, reported Automotive News yesterday. Based on the need of the China market, SsangYong has equipped the model with a 2300cc gasoline engine and made improvements on the exterior design. The model is expected to be sold in China beginning 2008 for over 20,000 units per year.

Although no specific details of the changes have been revealed, a spokesperson for the automaker, Choi Nam Hyun, said that some components will be sourced locally, although initially most will be imported from South Korea. The model will be built at Shanghai Automotive Industry Corporation's (SAIC) plant in Yizheng, Jiangsu Province, although the rate of production has not been specified.

The newly refurbished plant now builds the Istana van. However, only 4,000 units were built last year, in a plant that has a capacity of 20,000 units per year using a single-shift system, so it is hardly pressed for space. One reason why sales of the vehicle have not performed too well initially is that the amount of components brought in is above Chinese government regulations, requiring the levying of additional taxes. The company will thus no doubt be looking to reduce the number of components it brings in so as to become competitive in the local market against vehicles such as the Great Wall Hover, Toyota Landcruiser, and the soon-to-be-introduced Nissan X-Trail.

SsangYong Auto has been actively moving forward with its largest shareholder SAIC in building a joint venture in China to assemble the athletic multifunctional car Kyron. Ssangyong and SAIC announced a deal in 2005 to produce the Kyron in China, but the plan stalled due to strong resistance from Ssangyong’s union. Union leaders were worried Kyron production would shift fully to China and other models would follow. They also said parts sourcing from China would severely impact all of Ssangyong’s domestic suppliers.

SAIC, which holds a 51% stake in Ssangyong, has promised to invest 225 billion won ($ 32 billion) in the Korean auto maker to help it become more competitive. Ssangyong plans to introduce several new models in the hopes of raising global sales to 340,000 units by 2010.