SHANGHAI (Reuters) - South Korean carmaker Ssangyong Motor Co (003620.KS) could set up a manufacturing plant in its biggest global market China if sales there rise to 50,000 vehicles a year, the brand’s sole China agent Pang Da Automobile Trade Co Ltd (601258.SS) said.
Ssangyong, which is majority owned by Indian automaker Mahindra & Mahindra (MAHM.NS), expects to sell 50,000 vehicles in China a year by 2017 at the earliest, Pang Da, one of China’s biggest car dealers, said in a statement.
This year, Ssangyong expects sales of 20,000 vehicles in China, a more than three-fold jump from the 6,300 vehicles it sold a year ago.
Ssangyong Chief Executive Lee Yoo-il had raised the possibility of a joint-venture plant in China last month,Wang Yue, investor relations official at Pang Da, told Reuters.
Wang declined to give further details and a Ssangyong spokesman in South Korea said it was too early to discuss any potential partnerships in China, the world’s biggest auto market.
Foreign carmakers that want to make cars in China must take on a local partner. Pang Da does not have a manufacturing licence, but would be willing to invest in any Ssangyong joint venture, Wang said.
Founded almost 60 years ago, Ssangyong is bouncing back from near insolvency after it was rescued by Mahindra & Mahindra in 2011.
Prior to its brush with bankruptcy, the company was partly owned by China’s SAIC Motor Corp (600104.SS). SAIC sold all its stake in Ssangyong when the Korean automaker’s business slumped in the wake of the financial crisis of 2008.
Under Mahindra’s ownership, Ssangyong is investing nearly $1 billion on its product lineup as part of a strategic plan to break into the United States and Asian markets including China, CEO Lee has said.
Reporting by Samuel Shen in SHANGHAI; Additional reporting by Hyunjoo Jin in SEOUL; Editing by Miral Fahmy