News - SsangYong
SsangYong ‘performing very well’ in Australia
First wholly owned SsangYong subsidiary outside South Korea already a success story
3 Apr 2019
By JUSTIN HILLIARD in SEOUL
SSANGYONG Motor Company says the early signs are overwhelmingly positive after its return to the Australian market late last year, with the South Korean brand on track to sell more than 3000 new vehicles from a fast-growing 50-strong dealer network in 2019.
Speaking to journalists last week at Pocheon Raceway north of Seoul, SsangYong Motor Co export division managing director Sanjeev Saksena said the Australian operation – a $450 million investment and the company’s first wholly owned subsidiary outside its home market – is “performing very well”.
“It is almost like a textbook kind of actions that they are taking,” he said. “Just look at what has been done for the customers to see what they have seen.
“A very good marketing action has already taken place, and I understand that the TVCs and digital campaigns, they were really appreciated. We also have systems to get all the enquiries, etc, and measure and push. So, all of that is being done ideally.
“The (dealer) network is also really motivated because they’re seeing that the marketing support is there, so they’re all trying to put the best foot forward.”
SsangYong Motors Australia currently has 34 dealerships but plans to expand its network to around 50 by the end of this year as dealer interest continues to grow, according to communications and product planning manager Andrew Ellis.
“We’ll definitely hit 45, which is our target, but we might even get to 50,” he said. “We did a lap of the map last month. We drove around every state and caught up with every dealer in the capital cities, and we caught up with a couple of prospective dealers in all those states.
“Every dealer we saw has now signed and is going through the process of the paperwork.”
Mr Saksena added that dealer interest has been strengthened via overseas trips, including one last month to the Geneva motor show to see the fifth-generation Korando mid-size SUV make its international debut – a crucial model that GoAuto drove in South Korea last week.
“(The Australian dealer network) was there looking at the competition, they were looking at how everybody is launching their new products,” he said.
“They’re all together thinking how SsangYong has to be successful there and what actions should be taken by SsangYong Australia, what actions should be taken by the dealerships. So, everybody is aligned.”
Mr Saksena said the appreciation of SsangYong Motors Australia’s performance also extends to its customers, many of whom were caught in the changeover from independent distributor Ateco Automotive – which handled the brand between 2012 and 2016 – and the new factory operation, which officially relaunched in December last year.
“We have also done all the research with all the existing customers, and the existing customers are also very happy with the performance,” he said.
“As soon as SsangYong Australia started doing their campaigns, a lot of customers of SsangYong, they started connecting with SsangYong Australia (if) they had problems.
“We had a surge of spare parts orders and … we see huge shipments taking place, and then suddenly we see now the number of orders, etc, are all reduced.
“To connect with dealers is ideal, to connect with the existing customers is strong. We (have) this positive word of mouth going for us.”
Mr Saksena said he hopes there is a “big momentum of business happening” from SsangYong Motors Australia in terms of sales. He did not specify targets, however the head of the Australian operations, Tim Smith, told GoAuto in December that he was targeting 10,000 sales a year and a top-15 position for the brand by the end of 2022.
“As far as numbers are concerned, they’re going up month by month,” Mr Saksena said. “Growth: how much should that be? I would say that in case Ateco was doing some level, then at least we should cross it this year.
“If we are able to do better than where Ateco left at the end of business and the direction is positive, then we are satisfied.
“That is being practical, rather than saying, ‘I would like this number.’ Although, definitely, we are working on numbers. Unless you cite numbers and chase it, it doesn’t happen in any business.”
Mr Ellis said SsangYong Motors Australia remains on track to sell more than 3000 vehicles in 2019, with the Korando expected to account for at least 1000 of those.
“So far, we’re happy,” he said. “We’ve hit all of our wholesale targets.
“Rexton has really surprised us. Rexton Ultimate, we can’t get enough of it, which is great.
“Musso has been everything we thought it would be, so we’re confident Musso short-wheelbase and long-wheelbase will be good.
“We are very bullish about Korando, because it’s the biggest segment in Australia, but the good thing is we now have a couple of cars around it to help that fight.
“We think our line-up, and with the new Tivoli, it makes for a pretty exciting line-up.”
Asked if the performance of the Australia outfit will determine if SsangYong Motor pursues fully owned subsidiaries in other markets, Mr Saksena said that is “absolutely” the case.
“It almost like (an audition) for us, because there are so many markets where because of certain reasons, the distributor is not able to (make) the kind of marketing investments that are required,” he said.
“At a distributor level, he’s looking at certain margins, and with a factory-owned subsidiary or distribution, you are not looking at margins, you are just looking at maybe breaking even. So, you’ve got some leeway, and that leeway you try to invest in marketing.
“If this works for us, we will start replicating it in markets where the distributor is finding it difficult.
“We have very strong relationships with distributors, and if they would like to continue, then we would not like to (lose) them, but if some distributor is trying to exit, then we’ll take over.
“We will perfect this business model that we are trying to create in Australia. We have a very experienced team of people leading the business there.”
Mr Saksena said Australia was an “ideal” guinea pig given it is the 12th-largest market in the world for SUV and pick-up sales due to its relatively healthy economy.
“Here it was a situation where we (found it is) only marketing which is requiring investment,” he said. “Ateco clearly said that we cannot. Whenever they were confronted with low (sales), they’d reduce the prices and we started becoming cheap.
“And we always felt it was a new product line that was required for Australia and we had that ready, because when Ateco threw in the towel, then Tivoli and XLV were ready and we knew that and Korando was coming in with five-star ANCAP.
“And Musso and Rexton, they really have really strong base in Australia, because if you research on the web, people are talking very good about those two products.
“And we do not have the problems with DSI automatic transmission. When we went to Aisin, we felt that everything is great.
“And we did the customer clinics, so independent opinion from the customers (was sought), then KPMG also, we engaged them to guide us to what should be done. So, on their recommendation and finally ours, because we wanted to see if the network was there and if it is enthused about the new product portfolio, then we hit the ground running.
“If you talk to the dealers, they would have a pretty high opinion about SsangYong’s products and how SsangYong is supporting them.
“So, we felt that everything was right, so why not enter ourselves rather than just give up on the market? How can you give up on a market like this?”
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