Will Ssangyong’s Tivoli appeal to Chinese consumers?

Will Ssangyong’s Tivoli appeal to Chinese consumers?

Ssangyong Motor plans to beef up sales marketing in China as part of efforts to diversify its global client base after struggling from weak sales in Russia – its main importer – due to economic recession and a weak ruble.

The Korean unit of Indian auto giant Mahindra & Mahindra said on Monday the firm would start sales of its new mid-size SUV Tivoli Air in China after unveiling it at the Auto China 2016 in Beijing next week.

“With a more enhanced lineup, we will in earnest target the Chinese SUV market, which has seen a 40 percent annual growth,” the automaker said in its statement.

Market analysts are taking a wait-and-see stance on whether the automaker — which has a lower brand profile than other Korean car brands Hyundai Motor and Kia Motors in the nation – will be able to be a hit in the Chinese SUV market dominated by local automakers including China’s No. 1 SUV maker Great Wall Motor.

“Although Tivoli’s size — compact utility vehicle segments — is gaining popularity in China and the new SUV’s design and performance have been much improved, it still has to face tough price competition with low-priced cars from local firms,” said Lee Sang-hyun, an analyst from IBK Investment & Securities.

Ssangyong also plans to have production lines in China to avoid the 22.5 percent tariff on imported cars. But analysts said this may not take place in the near future due to lack of sales in the market.

“We may talk about production in China when we see enough local sales, let’s say more than 40,000 units,” Ssangyong’s spokesman Choi Jin-woong told The Korea Herald by phone.

Ssangyong said it sold around 3,800 units in China last year out of a total of 144,000 unit sales in the global market including Korea.

The company’s chief Choi Jong-sik said last month at the launch of Tivoli Air, “It may take at least three years to visualize the discussion of having production lines in China.”

Tivoli was a big contributor to the money-losing automaker’s turnaround in the fourth quarter of last year, for the first time in eight years, accounting for more than half of its total sales.

Source:   http://www.koreaherald.com/view.php?ud=20160418000825

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