SsangYong to remain in limbo until late 2017

SSANGYONG has committed to the Australian market following the demise of its distribution deal with Sydney-based importer Ateco Automotive, but the South Korean brand will remain in limbo until it is re-established here in the fourth quarter of 2017.

Aftersales and parts commitments will be honoured through Ateco in the interim, but no new stock will arrive and only a handful of vehicles remain in the hands of dealerships.

SsangYong general manager for the Pacific, Central and South America region Jay-Dong Woo told GoAuto the company “much appreciates the potential for growth of the Australian automotive market and promises to come back as soon as the market restructuring process ends in the fourth quarter of 2017”.

However, Mr Woo did not confirm the recent assertion by Ateco Automotive executive chairman Neville Crichton, who told GoAuto that SsangYong would establish a factory-owned Australian distributor.

One option is for SsangYong’s controlling stakeholder Mahindra Automotive to roll distributorship into its Brisbane-based captive SUV, ute and tractor importer, an idea not ruled out by the Indian firm’s CEO Pravin Shah during an interview with GoAuto in May this year.

At the time, Mr Shah pointed out that Mahindra’s factory-owned South African distributor also handles SsangYong vehicles in that country, emphasising that “both brands keep their identities intact and separate”.

“I think we’ll keep observing, keep evaluating opportunities (in Australia) without compromising how the SsangYong and Mahindra brands can exist, then make one plus one equal 11 rather than two,” he said.

Regardless, SsangYong will be keen to start afresh in Australia with fresh products as the newest model sold here is the Korando that launched in 2011 and was updated in 2014, while the Stavic people mover and Rexton off-roader trace their roots back to the early 2000s. The Actyon Sports ute, a 2012 reskin of the 2007 original, was quietly dropped Down Under earlier this year.

Without confirming anything, Mr Woo referred to the overseas success of the Tivoli compact SUV that launched in 2015 but never made it to Australia, and will soon be joined by the longer XLV version unveiled at this year’s Geneva motor show.

Ateco received Australian Design Rule certification for petrol and diesel Tivoli variants some time ago and even helped SsangYong conduct local hot-weather testing for the model, but refused to import it unless a sub-$20,000 starting price could be achieved.

Mr Woo also told GoAuto a “premium large SUV” called Y400 will enter production next year, based on the well-received LIV-2 concept revealed at the recent Paris show and expected to replace the Rexton.

“At the same time, we have been doing our best to develop environmentally friendly cars such as electric vehicles and autonomous vehicles,” he added.

“SsangYong Motor Company is confident that future growth for the brand will be fully ensured in the Australian market driven by future-oriented and specialised market strategies.”

Mr Woo said SsangYong “will launch more than one new car every year” and the company plans to “strengthen its market competitiveness by securing stable sales volume and launching upgraded models”.

SsangYong sales are down 61.5 per cent to the end of October this year with monthly averages of around 34 units. It has not breached 30 units per month in the second half, with just 12 vehicles sold last month.

Even with dwindling sales, stock is likely to dry up well before the new distribution arrangement is drawn up, as Ateco Automotive director Ric Hull told GoAuto earlier this month that “fewer than 50” unsold SsangYongs remained within the dealership network.

In the meantime, SsangYong has the complex task of setting up or finding a new distributor in Australia, plus transferring dealership and customer data from Ateco’s systems into that of the new operation – be that independent, an extension of existing Mahindra infrastructure or from scratch.

Mr Shah told GoAuto that Mahindra and SsangYong share a “synergy committee” that scouts for joint distribution opportunities in addition to the potential for sharing platforms, drivetrains and other components.

However, GoAuto understands the 2011 rescue of SsangYong by Mahindra has not been plain sailing due to cultural and operational differences between the two companies, and that this has spilt over into the joint distributorship operation in South Africa.

Australian SsangYong distribution last changed hands in October 2012 when it moved from Malaysian-owned Sime Darby to Ateco. Shortly afterwards, Citroen left Ateco to join French sister company Peugeot at Sime Darby.