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Frankfurt show: SsangYong delays Aussie comeback

Double down: SsangYong is set to become the newest factory player in the Australian automotive market, with the new Rexton leading the charge.

SsangYong now aims for return to Aussie market ‘within the next 12 months’

SsangYong logo13 Sep 2017

By TERRY MARTIN and TIM ROBSON

SSANGYONG has pushed back its return to the Australian marketplace by almost a year, with the South Korean brand confirming at the Frankfurt motor show this week that it was aiming for a comeback as a factory operation “within the next 12 months”.

As GoAuto has reported, SsangYong was aiming for a relaunch here in the fourth quarter of 2017, with a “market restructuring process” – in which the company completes the transition from its previous independent distribution arrangements with Ateco Automotive to a factor-run business – due to be completed by the end of this year.

However, SsangYong Motor Company senior executive director of export Dan Rim told Australian journalists in Frankfurt that the company still had work ahead of it before relaunching Down Under with a new – and more affordable – line-up and a fresh target of more than 4000 sales a year.

“We’re trying to start our own operation in Australia,” Mr Rim said. “We’re going through the due diligence now, setting up a corporation, setting up a distribution centre. It’s all in the works, and hopefully soon we’ll start retailing again within the next 12 months.”

SsangYong, which is majority-owned by Indian conglomerate Mahindra, used the Frankfurt show to whip the covers off its new G4 Rexton large SUV, which was making its European debut after premiering at the Seoul motor show in March.

The 4850mm-long SUV will be offered in front- and all-wheel-drive format, powered by either a 131kW/400Nm 2.2-litre turbo-diesel or a newly announced 2.0-litre direct-injection petrol engine. A six-speed manual gearbox or seven-speed automatic transmission can also be selected.

The small Tivoli SUV is also on the agenda for launch in Australia – a model that Ateco wanted to sell in Australia, but could not come to terms with the factory on appropriate positioning in the market – while the mid-size Korando SUV is destined to return.

The company is set to launch a new version of the Actyon pick-up in both short- and long-deck versions, known internally as the Q200.

Mr Rim said acknowledged that the Australian market was one of the toughest in the world, but new strategies should see it succeed.

“We’ll have a much closer communication with the markets through our own distribution and through our franchisee dealers,” he said. “So we’ll have closer communication and we’ll know in real time what the market wants, so we can bring the product the market needs.”

Mr Rim said that pricing levels – a major friction point between Ateco and SsangYong – would be brought down under factory management.

“Since we’ll start our own distribution, I think it will be more competitive,” he said. “And we’ll be handling our own marketing, so we’ll prioritise our spending the way it needs. We’ll be more competitive and more efficien.”

Mr Rim also suggested that all of the brand’s former dealers were still keen to be involved with the factory operation.

“The dealer network that used to carry SsangYong would very much like to see us come back and work with them directly,” he said. “So we’re looking forward to utilise the existing network, and of course we need to build on from what we have today.”

Mr Rim indicated that the metropolitan areas would be prioritised initially, but country areas would also be considered.

The company has not yet selected a location for a corporate headquarters.

Ateco Automotive took over SsangYong distribution from Sime Darby in October 2012, selling just 3787 cars from 2013 to the end of 2015 after being stymied by ageing models, relatively high prices and difficulties in sourcing product with what it considered to be suitable pricing and specification for this market.

Ateco initially targeted 3000 sales a year within 12 months of taking over the brand, counting on measures such as simplifying the model mix, building in more value for money, employing efficient marketing strategies and expanding the dealer network.

Mr Rim said this week that he believes SsangYong can sell in excess of 4000 units a year in Australia, potentially putting it ahead of brands like Peugeot, Mini and Skoda.

Sime Darby was responsible for SsangYong from September 2008 to 2012, having taken over the distribution rights from SsangYong Motors Australasia which was run by Russell Burling and Vince Barbagallo.

Sime had to contend with the fact that SsangYong went into bankruptcy protection early in 2009, as well as industrial action in South Korea that at the time cast doubt over whether the brand would remain afloat in Australia.

From sales of 2645 units in 2005, the brand managed only 1372 in 2008 – a 35.4 per cent downturn that year alone compared to 2007 – and then fell to 1054 units in 2009.

Since then, the brand has never sold more than 1606 units in a single year – achieved in 2011 – so the new target of 4000 units per annum looks ambitious to say the least.

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