Ssangyong sees U.S. sales in 2-5 years

GREGORY ROBINSON
Ssangyong showed this SUT 1 sport-utility pickup concept in Geneva.

Mahindra & Mahindra, the Indian truckmaker that has so far failed in its attempt to export pickups to the United States, may find its way to the U.S. market after all--through a Korean company, not an Atlanta distributor.
Ssangyong Motor Co., a Korean SUV specialist now controlled by Mahindra, plans to sell vehicles in the United States in two to five years, Chairman Yoo Lee told Automotive News.
Ssangyong, in which Mahindra recently bought a 70 percent stake, sees a sales potential of up to 20,000 units a year in the United States and wants to enter the market "two to three years from now--but within five years at the latest," Lee said at the Geneva auto show. "We still need time to fulfill all strict emission and safety regulations."
Lee said the United States is a pillar in Ssangyong's strategy to double global sales from the expected 120,000 units this year to 240,000 by 2014, filling the capacity of its Korean plant.
That's good news for Mahindra, which last month completed the purchase of the Ssangyong stake. Mahindra bought control of the SUV specialist from Ssangyong's creditors after the previous controlling owner, China's Shanghai Automotive Industry Corp., pulled out.
Mahindra, India's largest manufacturer of SUVs and tractors, originally had planned to begin U.S. sales in mid-2009, but that target has been pushed back repeatedly.
Legal snarl
Ssangyong's plans roil the legal quandary in which new owner Mahindra and about 350 U.S. would-be Mahindra dealers now find themselves.
Until last summer, Mahindra was planning to enter the United States through an independent distributor, Global Vehicles U.S.A. Inc. of Atlanta. Global Vehicles CEO John Perez had spent four years assembling the U.S. dealer network to sell diesel-engine compact pickups from India.
But after years of waiting for the trucks, that partnership collapsed just days before the EPA certified Mahindra's pickup as meeting U.S. emissions standards.
The 350-dealer network is in limbo, waiting to hear a British arbitration panel's ruling on Global's request that Mahindra be forced to honor its U.S. deal with Global Vehicles and give the pickups to Global Vehicles' dealer network.
Dealers in the dark
The dealers say they remain in the dark about what will happen to their Mahindra franchises.
"I don't know whether this Ssangyong news changes anything for us because none of us know where we stand," said one would-be Mahindra dealer, Bud Robke, owner of Robke Automotive in Florence, Ky.
"One thing it does do is lend more credence to Global Vehicles' complaint that it has been jerked around by Mahindra on its contract."
Perez told Automotive News last week that he was not surprised by Ssangyong's decision to enter the United States. He said he had approached Ssangyong in 2001 to propose distributing the Korean company's vehicles before he hooked up with Mahindra.
Perez said he is concerned that Ssangyong will become the back door for the U.S. entry of Mahindra products that should have come to his franchised dealers.
Lee did not specify a strategy for importing or distributing cars in the United States. He said SUVs will represent the bulk of Ssangyong's product strategy and that "we will keep concentrating on SUVs in the future."
Lindsay Chappell contributed to this report.

http://www.autoweek.com