Mahindra looks to China for Manufacturing SsangYong Vehicles

Mahindra & Mahindra Ltd is apparently looking towards China for setting up a manufacturing facility for its loss making Korean auto maker Ssangyong Motor Co. The Indian firm has also dropped its investment plans for the US to put more focus on China.

Mr. Pawan Goenka, the executive director at Mahindra has said that the manufacturer is currently in talks with a Chinese firms to enter into a joint venture to produce Ssangyong vehicles in China. At present SsangYong vehicles are imported from South Korea and are sold through local distribution network.

In the year 2011, Mahindra had acquired a stake of over 70 percent in Ssangyong and helped it from near-insolvency. However, South Korea's popular automaker has failed to live up to the expectations and reported a net loss of 61.9 billion won ($51.6 million) for 2015.

Mahindra looks to lower the prices of SsangYong cars by setting up a manufacturing facility in China. The company believes that this would be a wise option to go with before making any investment plans in the US.

“China is easier to look at right now because Ssangyong already has a presence there. We have some traction and need to ramp up our products for local manufacturing. China is here and now, US is the future. We are still deciding what it takes for us to launch in the US. The US is not somewhere you can go in without significant investment in product and brand development. Given the various priorities we have, the US is now somewhat on the back burner, but not stopped,” said Goenka. Adding to this, he further said that the SsangYong vehicles at present are not in compliance with the US regulatory norms.