Mahindra says committed to long-term stake in Ssangyong

Mahindra and Mahindra Ltd. has no intention of selling any of its stake in Ssangyong Motor Co. in the near future, and will fully support Ssangyong’s revival, Mahindra and Mahindra vice chairman Arnand Mahindra said Thursday.

Speaking at a press conference on the sidelines of the Seoul Motor Show in Goyang, Gyeonggi Province, Mahindra said that his company has a track record of turning companies around and that it is not interested in short-term gains.

“Look at out track record as a group. This is not the first international investment, this is not the first acquisition we made. We do not make short term investments,” Mahindra said in response to queries about Mahindra and Mahindra’s potential plans for some of its stakes in the Korean carmaker in the future.

“We are accustomed to building businesses, and we are accustomed to being marathon runners.”

Mahindra and Ssangyong executives also revealed some of the plans that are in the works for Ssangyong.

“Teams are already working to launch Ssangyong vehicles in India,” Mahindra said, declining to go into details about the “action plan” Mahindra and Mahindra has for Ssangyong. The two companies are currently working on introducing the Korando C and Rexton SUVs to the Indian market, to which the vehicles will be shipped as knock-down kits and assembled at Mahindra and Mahindra’s new facility in western India to avoid high tariffs.

“We are also looking for joint-marketing opportunities in other geographies. For instance Africa. Africa is the next frontier for automotive growth.” Mahindra added that as Africa is comprised of very diverse markets that range from the mature market of South Africa to the rapidly expanding ones of oil-rich nations, Ssangyong has much potential for growth in the region.

Regarding the company’s plans for smaller vehicles, Ssangyong’s new chief executive Lee Yoo-il said that while such plans are in the works, the company will remain within the boundaries of its expertise.

“By small models, we do not mean small passenger cars, we mean small crossover vehicles,” Lee said.

“The project is still in the planning stage, and no details are available, but we are looking at small crossovers as the market for small passenger cars is very competitive and there is little room to make profits.”

By Choi He-suk   (cheesuk@heraldcorp.com)