Ssangyong Motors announced on Oct. 11 that it signed a letter of intent with Shaanxi Automobile Group in Xi’an, China, in order to set up a joint venture.
According to the agreement, Ssangyong Motors is to conduct a feasibility study before the construction of its car manufacturing facilities in China. Once the final contract is concluded, Ssangyong Motors is to build an automobile industry cluster with its partner firms in the Xi’an Economic-Technological Development Area located in Shaanxi Province. Then, the cars that are currently produced and developed by Ssangyong Motors can be manufactured there, which will make Ssangyong Motors’ first overseas manufacturing activities.
Until recently, the South Korean automaker gave careful thought to the construction of manufacturing facilities in China’s midwest in view of the Chinese government’s policy and the growth potential of the Chinese car market, which is the largest of its kind in the world. Its local production of sport utility vehicles in partnership with the Chinese company is expected to contribute to its presence in the Chinese market.
Established in 1968, the Shaanxi Automobile Group has an annual commercial vehicle production capacity of 100,000 units. It currently ranks 21st among the top 500 machinery companies in China.