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RTTNews) - Thursday, Chinese automaker, Shanghai Automotive Industry Corp. dropped its plans of setting up a joint venture factory with South Korea's Ssangyong Motor Co., to manufacture SUVs, sources familiar with the matter said.
Shanghai Automotive Industry is a longtime partner of General Motors Corp. and Volkswagen AG. The company owns a 51% stake in South Korea's Ssangyong.
Though the reason for the cancellation of the project was not known, the companies are still discussing other ways to expand in China, sources said.
Shanghai Automotive Industry had earlier agreed to partner with Ssangyong to build a factory in China to manufacture about 100 thousand SUVs a year in Shanghai.
Due to rising gasoline costs and stringent pollution control measures, the demand for luxury vehicles is slowly on the wane while Economy models are gaining popularity. Copyright(c) 2006 RealTimeTraders.com, Inc. All Rights Reserved
source:http://www.tradingmarkets.com/tm.site/news/ASIAN MARKETS/207964/
 

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SAIC hits the brakes on making Ssangyong cars
Jin Jing
2006-03-30
SHANGHAI Automobile Industry Corp, the owner of South Korea's Ssangyong Motor Corp, said it would not build a plant to produce Ssangyong's models in China as it focuses more on costs and efficiency.

"We always hope to carry out a localization strategy for Ssangyong in China," according to an official from the communication department of SAIC, the second largest automaker domestically.

"But we considered whether it is necessary to build a factory here as it involves huge investments in land, facilities, equipment and workers."

The communication department also said SAIC is still working on plans to boost awareness and brand image of Saangyong's cars. The plans include launching two new imported models in May, and seeking other avenues such as licensed manufacturing.

SAIC, which make cars with General Motors Corp and Volkswagen AG in China, paid more than US$500 million for a combined 51 percent of Ssangyong in early 2005 to enhance its international competitiveness.

SAIC and Ssangyong agreed to set up a joint venture in Shanghai to make sports utility vehicles with an annual capacity of 100,000 units, part of its US$1 billion investment in the South Korean carmaker, by 2010, according to previous media reports from South Korea.

Two months earlier, Ssangyong also said it would invest 2.5 trillion won (US$2.5 billion) in the next five years to develop new models and double sales target.

But on Tuesday, Choi Hyung Tak, chief executive officer of Ssangyong, said the firm had scrapped its plan to expand further in China due to tight macroeconomic control on the automotive industry by the central government.

However, Chung Mu Young, a Ssangyong spokesman, said the Chinese government's requirements that the firm set up additional facilities, including a research and development center which would cost the company too much money, killed the plan.

But an auto analyst believed that SAIC is still in a favorable position to snare a bigger share of the Chinese auto market.

"SAIC does not lack models in China to capture more market share," said Zhang Xin, an auto analyst from Guotai Jun'an Securities Co Ltd.
http://www.shanghaidaily.com/art/2006/03/30/255753/SAIC_hits_the_brakes_on_making_Ssangyong_cars.htm
 

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too bad it didnt work out, this would of been a good way for chinese markets to enter korean markets
 

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the takeover of Ssangyong

SAIC took over 49% of Ssangyong's shares in late 2004. How is this deal going on now? Do you think it can be regarded as a successful deal?
 

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SAIC to rev up S. Korean Joint Venture

Jin Jing
2006-12-19
SHANGHAI Automotive Industrial Corp is restarting its plans to set up a joint venture with Ssangyong Motor Corp in China to accelerate the South Korean car maker's expansion in the local market.

"The program is again under feasibility study, but shareholdings and total investments have not been decided," a company source told Shanghai Daily.

The communications department at SAIC, the nation's biggest car maker, confirmed the development yesterday.

SAIC, which spent US$500 million for a 51 percent stake in Ssangyong, planned to set up a joint venture in Shanghai to make sport utility vehicles, including the Kyron model, with an annual capacity of 100,000 units. The deal was to be part of the company's US$1 billion investment in the South Korean car maker by 2010.

But the plan was suspended after concerns arose from the South Korea car maker's labor union that the Chinese operation would lead to the loss of technology and job cuts in the home market.

"Moving to China doesn't mean we plan to close factories in South Korea, and the cooperation would benefit both parties in technology as well as products," SAIC said.

The introduction of Ssangyong's SUV models would help SAIC expand product portfolio.The company mainly produces cars in cooperation with Volkswagen AG and General Motors.

source; shanghaidaily.com
 

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Ssangyong (SAIC owned)to Build Cars in China From 2011

Ssangyong Motor said it plans to build a plant and start producing cars in China before 2011 in cooperation with its mother company Shanghai Automotive Industry Corporation (SAIC). The carmaker’s possible step to move its production base overseas is expected to generate controversy as the latest plan suggests that Ssangyong Motor will manufacture in China all its cars to be sold in that country.
Phillip Murtaugh, one of Ssangyong Motor’s chief executives, unveiled mid- and long-term growth plans at the Westin Chosun Hotel in Seoul Wednesday. The automaker aims to earn W6 trillion (US$1=W938) in sales and sell 330,000 cars by 2011. To get there, Ssangyong plans to shed its image as a sports utility vehicle maker and add new models to its lineup including sedans.

Murtaugh said the company will release a 2,000cc sedan in Korea to compete with Hyundai’s Sonata. It will also develop seven more new models including passenger cars and multi-purpose vehicles to become one of the top three car brands in terms of market share in Korea by 2011.

The SAIC’s Korean, Chinese and European researchers are currently working on Ssangyong’s new models, which are based on the platforms of British carmaker Rover’s Rover 75 and 25.

([email protected] )
 

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Ssangyong's target market is probably China and beyond, so building the cars in China makes perfect sense.

To make cars in S Korea and ship them over to China is out of the question anyway - financial/economical nonsense.

How about shipping cars from China to S Korea? It's economically sound, but given S Korea's notorious restrictions on imports, how's that gonna work out?
 

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Although 2011 is a long way off, that's good news for SAIC-Ssangyong. It seems that last March the government nixed the “S” project aimed at building a plant to produce an SUV on the Kyron platform. I believe it was going to be built out in Yizheng.

Lately the government has been discouraging over investment in car plants. But Shanghai Daily in June reported that the company had not given up.

Double Dragon had always wanted to export to the U.S. and now under SAIC management that's still the ultimate goal.
 

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BringIt said:
Ssangyong's target market is probably China and beyond, so building the cars in China makes perfect sense.

To make cars in S Korea and ship them over to China is out of the question anyway - financial/economical nonsense.

How about shipping cars from China to S Korea? It's economically sound, but given S Korea's notorious restrictions on imports, how's that gonna work out?
S.K charge 8% of CIF (Cost insurance freight) for the import car and other tax is same as the domestic cars. How much do they charge for the fully assembled import car in China?
 

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BringIt said:
To make cars in S Korea and ship them over to China is out of the question anyway - financial/economical nonsense.
It is actually the issue of import duty. It is always cheaper to build a Ssangyong of equal quality and content in Korea than in China. The reason it cannot be done is because of China's 35% import duty on foreign vehicles.

How about shipping cars from China to S Korea?
Not feasible either. Korea has a tough emissions standard that even European makers complain about. And then there is the 10% import duty(8% is for vehicles with displacement of 2000 cc or under, so doesn't apply to Ssangyongs)

It's economically sound, but given S Korea's notorious restrictions on imports, how's that gonna work out?
Actually there has been studies on selling Indian(Tata Indica) and Chinese(Zhonghua) vehicles in Korea. Both turned out to be not feasible as they were only 10% cheaper at retail, even though they were decades behind Hyundai models in engineering and quality. The same problem with SAIC's Roewe to be assembled by Ssangyong. SAIC cannot price this vehicle for more than $1000 below Hyundai Sonata, but Roewe is a full segment smaller than Sonata and is actually comparable to compact(really a midsizer by the US standard) Elantra in size.
 

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Real_I_Hate_China said:
And then there is the 10% import duty(8% is for vehicles with displacement of 2000 cc or under, so doesn't apply to Ssangyongs)
10% is not an import duty... it's called as "special consumption tax" and it's also applied to the domestic car as well. The import duty is 8% as I said.
 

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BringIt said:
Ssangyong's target market is probably China and beyond, so building the cars in China makes perfect sense.

To make cars in S Korea and ship them over to China is out of the question anyway - financial/economical nonsense.

How about shipping cars from China to S Korea? It's economically sound, but given S Korea's notorious restrictions on imports, how's that gonna work out?
it it not what you said, building cars in China is just for cost-down due to lower lab cost, and also these cars will be sold in China. As you know, China car market is growing rapidly, and the production capability of Korean Ssangyang could not meet this growth, I think. As I know, many of carmakers is building the manufacturing factories in China or put more assembly lines to enhance their production volume, because they want more market shares.
 

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SAIC Ssangyong Motor Earned KRW1.2bn in Q3

SHANGHAI, Nov 02, 2007 (SinoCast via COMTEX) -- SYGMF | charts | news | PowerRating -- Ssangyong Motor Co. (KSE: 003620), a controlled subsidiary of Shanghai Automotive Industry Corporation (Group) (SAIC), made profits of KRW 1.2 billion in the third quarter of 2007.

Ssangyong Motor, a large South Korean automaker specializing in SUV manufacturing, achieved KRW 745.4 billion sales revenues in Q3, up 23.3% from a year earlier, and KRW 16.5 billion operational profits, down 2.8%.

The company gained KRW 6.2 billion profits with an 8.8% rise in the second quarter of this year, the first positive performance since it was acquired by SAIC in 2004.

Ssangyong sold 24,734 SUVs in South Korea in the first half of 2007, accounting for 22.8% of the country's total sales of 108,254, surpassing its rival Kia Motors for the first time.
 

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SsangYong to launch China-made Kyron SUVs.

March 28, 2008 - 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.
source: Gasgoo.com
 

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SAIC to make Kyron Chinese version in the year end.

April 17, 2008 - South Korea's carmaker SsangYong Motor Company announced recently that it will produce the Chinese version of Ssang Yong SUV Kyron along with Shanghai Automotive Industry Corporation (SAIC).

SAIC also told to reporters last week that SAIC is now cooperating with SsangYong to develop independently an SUV, while the details of the model and the delivering time are not disclosed at present. Sources confirmed that SAIC will soon produce own-brand SUV, with the latest Kyron as the prototype, and will first deliver a 2.3-liter version then.

Now, SsangYong has launched the 2.0-liter 2008 version and 2.3-liter Kyron priced at 243,800 yuan ($34,830) to 293,000 yuan in China. SsangYong said that at the end of this year locally-made Kyron will be upgraded based on the existing Kyron on some accessories, in order to cater to the Chinese consumer's demand and taste. A market analyst noted that the Chinese-made SsangYong Kyron will be at least 50,000 yuan cheaper than the imported vehicle.

Sources said last week that the Kyron Chinese version which soon will be launched is not the joint project by SAIC and SsangYong, but SAIC will produce domestically by paying certain technical fees to SsangYong. Thus the Chinese edition of Kyron is the independent brand SUV of SAIC, and will carry SAIC brand logo.
source: Gasgoo.com
 

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SAIC waits government approval to build Ssangyong SUVs in China.

June 25, 2008 - Shanghai Automotive (SAIC) and its majority owned SsangYong Motor have finished building up their production lines at their joint venture plant, a senior company official told reporters on June 23.

The sides are currently only awaiting the government approval to launch production at the former SAIC plant at Yizeng, Jiangsu province. The plant will be operated in a 50/50 partnership.

Hu Maoyuan, chairman for SAIC, says at the launching ceremony for MG 3SW that it is not expecting any difficulty in obtaining the approval, but he declines to say when his company will start production at the plant.

SsangYong now export Rexton, Kyron, Actyon and Rodius to Chinese market. Industry analysts say the comparably hot selling Rexton is likely to be made at the plant, where SAIC's own Roewe brand is also expected to be made.

source: Gasgoo.com
 

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Ssangyong Motor's union to send delegation to China.

July 22, 2008 - The labor union of Ssangyong Motor Co. said Tuesday it will send a delegation this week to the headquarters of Shanghai Automotive Industry Corp. to protest what it called the Chinese parent's mismanagement and demand a pay increase.

Union leaders have also been upset as a sudden drop in vehicle sales of Ssangyong, 51 per cent owned by SAIC, could put Ssangyong into a liquidity crisis unless the Chinese parent injects fresh capital into the South Korean unit.

Hit by higher fuel prices and the stagnant South Korean economy, Ssangyong saw its domestic sales plunge 67 per cent on-year to 1,902 units last month.

Ssangyong, the smallest automaker in South Korea, sold 26 per cent fewer vehicles in the first six months of this year as consumers particularly shun its gas-guzzling sport-utility vehicles. Ssangyong's vehicle lineup is dominated by SUVs and luxury sedans.

"The delegation, led by Ssangyong's union chief Chung Il-kwon, will meet SAIC vice chairman Chen Hong in China on Wednesday," a union official said by telephone, declining to give details.

On Monday, the union said it has agreed with management on a shutdown of the company's only plant for three weeks from July 31 to cut back production amid sluggish demand.

The decision underlined a dilemma facing Ssangyong, which has no small cars in an era of expensive gas prices, analysts say.

Officials at Ssangyong's public relations team weren't immediately available for comment.

Since SAIC bought the controlling stake in Ssangyong for US$500 million in 2002, Ssangyong's unionists have accused the Chinese parent of trying to copy technology without spending for the development of new models.

Early this year, prosecutors raided Ssangyong's plant as part of their investigation into allegations that it illegally leaked hybrid technology to SAIC.
From:AsiaPulse
 
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