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Benz on red alert

Benz-powered: Rexton uses a Mercedes-derived 2.7-litre CDi turbo-diesel.

No cause for alarm, but Mercedes keeping close tabs on Korean ‘partner’

Mercedes-Benz logo21 Jul 2005


THE resurgence of SsangYong in Australia has placed DaimlerChrysler’s Mercedes-Benz operations on full-scale alert as the Korean brand continues to trade on its Mercedes connections.

The managing director of Mercedes-Benz passenger cars in Australia, Horst von Sanden, told GoAuto last week that from a "brand communications" point of view he "was not very happy for them to focus so strongly on Mercedes-Benz".

"It’s no secret that Mercedes-Benz technology is used in the vehicles but we still think that it’s still misleading if they put it in their communicationor focus so much on that," he said.

Although he had no issue with SsangYong advertising the origins of the technology used in its vehicles, Mr von Sanden said he would be concerned about any "blatant" misuse.

The niche South Korean manufacturer’s Australian distributors, Rapson Holdings,revealed to GoAuto earlier this month that it was planning a serious assault on the Australian market with a range of new four-wheel drive wagons, all of which use Mercedes-Benz engines and transmissions.

Rapson Australia managing director, Keith Timmins, said the Mercedes connection had been beneficial from a marketing point of view.

However, he said it was not necessarily something the company would push when its new vehicles started arriving.

"The brand is getting to a point where it’s strong enough to stand alone in a marketing sense," he said.

"I suppose we still traffic in it (the connection) by using the Benz gearbox. The history is one that’s a proud one and being related certainly doesn’t hurt you in the marketplace."Mr Timmins said SsangYong was aware of the importance of not over-stepping the association with Mercedes.

"The Koreans are very mindful of playing the game the right way," he said. "And we’ve not had any complaints from either Mercedes or the Koreans."Mercedes’ concern comes from the fact that some of the newer SsangYong four-wheel drives will compete against Mercedes-Benz 4WDs, though priced much lower.

But Mr Timmins said the more relevant competitors would be from Japanese four-wheel drives.

"Our natural competitors are going to be the Japanese," he said.

Among the new SsangYongs will be an upgraded Rexton medium-size 4WD, due in thefirst quarter of 2006 and priced from around the $50,000 mark.

Around the same time, SsangYong’s Kyron 4WD will make its Australian debut priced around $35,000 and carving out a slice in the all-important small-SUV market segment – which Mercedes will enter before long with its own entrant, dubbed MLK.

Notwithstanding the fact that SsangYong vehicles were sold through Mercedes-Benzdealerships in the 1990s, Mr von Sanden said most Mercedes-Benz customers were well aware SsangYong was a Korean brand.

"For us, it’s about our customers," Mr von Sanden said. "It’s not about rivalry or whatever.

"There is no doubt within our customer base that SsangYong is far away from our brand.

"But what we certainly would not accept is if they do misleading things. We don’t want our customer perspective to get confused."The forthcoming Chairman prestige sedan and SsangYong’s current 4WD stableuse Mercedes-Benz engines, transmissions and other components under licence.

The Rexton uses a Mercedes-derived 2.7-litre CDi turbo-diesel engine combinedwith a Mercedes-sourced tip-shift automatic transmission.

The Kyron is scheduled to offer three Mercedes-derived powerplants – twodiesels and a petrol V6.

The Korean company originally used a superseded in-line 3.2-litre six cylinder under licence from Mercedes for its Chairman.

According to Mr Timmins, that licensing agreement has expired and SsangYongnow manufacturers the engine itself.

Mercedes-Benz has cut most of its ties to Korean product in Australia, most recently axing the petrol and diesel MB-Series van from its light commercial vehicle line-up.

However, Mr von Sanden said the decision to drop the MB van was more a case of the vehicle’s age than its origin.

SsangYong has been aligned with Mercedes-Benz since 1991 when a licensing agreement was established to allow the use of light-commercial diesel andpetrol engines and other components.

The Musso has been in production since 1993 and it and the short-wheelbaseKorando 4WD were sold through Mercedes-Benz Australian dealers in 1996.

In 1998 fellow Korean car-maker Daewoo took a controlling interest in SsangYongand products such as the Musso were sold through Daewoo dealers in Australia.

That arrangement ended in 2000 and the GM group subsequently took a controlling stake in Daewoo and SsangYong Motors became an independent.

Earlier this year, the number-one Chinese car manufacturer, Shanghai AutomotiveIndustry Corporation, took a 48.9 per cent controlling interest in SsangYong.

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