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Apr 25, 2012

South Africa loves Korean brands, will SsangYong be next?

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Africa|Building|Diesel|DIESEL ENGINES|Engines|Hyundai|Kia|Mahindra SA|Mahindra South Africa|Power|SsangYong|System|Africa|South Africa|Product|Products|Service|Vehicle Manufacturer|Ashok Thakur|Johng-Sik Choi|Korando|Korando|Operations|Rexton|Diesel
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While Hyundai and Kia have made great strides in the global and local markets, the same cannot be said for sibling vehicle manufacturer, SsangYong.

Last year, the financially embattled Korean brand sold around 500 vehicles in South Africa and 113 000 vehicles globally.

However, since being revived by Indian manufacturer Mahindra, which bought around 70% of SsangYong last year, there is hope this lesser-known brand may follow in the footsteps of its fast-growing fellow Korean brands.

The acquisition has also seen Mahindra South Africa (MSA) take over the local distribution of SsangYong vehicles from the Imperial Group.

The global aim is for SsangYong to reach sales of 310 000 vehicles by 2016, with 198 000 of these to be sold abroad.

This year’s sales target is 123 000 units.

Currently, SsangYong sells vehicles through 1 200 dealers in 96 countries. (The global Mahindra network has 800 dealers in 33 countries.)

In Africa outside South Africa, the Korean brand aims to increase sales from 3 500 units in 2012, to 6 000 vehicles in 2016, says SsangYong sales and marketing VP Johng-Sik Choi.

“The African continent, and especially South Africa, is integral to our overall global expansion strategy. [This year] is the starting point for our medium- to long-term strategy and we at SsangYong are determined to meet our goals, while expanding the global network and building brand recognition and trust. Our main objective is to become a global leader among manufacturers of sports-utility vehicles (SUVs).”

The Korean company is looking to grow the number of its African distributors from 15 to 19 by the end of next year, and cover all major African markets by 2016.

“The sales of SUVs and recreational vehicles in Africa have increased by more than 50% in the past two years, while South Africa remains a growth market in these segments,” adds Choi.

“The sales of Korean SUVs in South Africa have grown by 285% in this period, going from 4 800 units to 18 500 units.”

Choi notes that the quality of SsangYong products is on par with its Korean competitors such as Hyundai and Kia.

“We plan to introduce four improved SsangYong models in the South African market by mid-2013,” notes MSA CEO Ashok Thakur.

These include the Korando petrol-engined SUV and the new Actyon Sports pick-up, launched earlier this week, with two more models to be unveiled over the next 12 months, namely the restyled Rexton and the revamped Stavic.

SsangYong also has plans to introduce a further three new models onto the global market by 2016, including the XIV-2, which it describes as a premium crossover utility vehicle.

“The plan is to grow sales in South Africa from an anticipated 1 500 units next year to 10 000 units in 2016, when there will be seven model ranges. This will be aided by an increase in dealers, with the plan to lift the current number of 19 to 30 by the end of 2012,” explains Thakur.

Mahindra does not regard SsangYong as competition for its own brand, as it produces more hard-working utility vehicles for commercial purposes, says Mahindra & Mahindra international operations CE Ruzbeh Irani.

“SsangYong has enabled us to double the size of our overseas presence,” he adds. “It gives us immediate scale.”

THE NEW KORANDO AND ACTYON SPORTS

MSA this week introduced the first two SsangYong models to be sold locally under its watch – the Korando SUV and the Actyon Sports recreational bakkie.

The Korando is an upgrade of the current version, while the Actyon is a completely refreshed model.

More importantly, says Thakur, the price bands on both models have been lowered to ensure it draws more buyers and much-needed attention.

Both models come with a choice of diesel or petrol engines. Previously, these two SsangYong models were available locally only with diesel engines.

It is the introduction of the petrol engines that havs enabled Mahindra SA to drop the starting prices for these models by a significant amount.

The prices of the five-model Korando range go from R249 995 to R324 995, while prices for the three-model Actyon Sports line-up range from R269 995 to R319 995.

Previously, the Korando line-up started at just below R300 000.

The Korando range in South Africa now consists of five models, two with a 110 kW petrol engine and three powered by the 129 kW diesel engine.

Four of them have two-wheel drive and a six-speed manual gearbox, while the range-topping deluxe diesel variant has a six-speed automatic transmission, linked to a part-time four-wheel drive system, with the ability to lock the transmission in all-wheel drive when necessary.

There are three models in the Actyon Sports range. Two are part-time four-wheel drive, one with a petrol engine and the other a deluxe version powered by a two-litre turbo diesel engine. The third derivative is a two-wheel-drive diesel.

The petrol engine of 2.3 l delivers 110 kW of power and 214 Nm of torque, while the 2 l diesel puts out 114 kW of power and 360 Nm of torque.

The diesel engines are mated to a six-speed manual transmission, while the petrol variant has a five-speed gearbox.

Both the Korando and Actyon are backed by a three-year/100 000 km warranty and three-year/60 000 km service plan, with service intervals set at 15 000 km.

While SsangYong is hoping for a revival in South Africa and abroad with its new models and new Indian partner, MSA also harbours some its own ambitions.

It is hoped the addition of a second product range will be another building block in the strategy for the company to become a much bigger player in the South African market.

“We sold over 2 000 vehicles in 2011 and are targeting 5 000 unit sales this year, rising to 7 000 in 2013,” says Thakur.

Edited by: Creamer Media Reporter

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