Expansion into Middle East
SsangYong Motor Company, part of the Mahindra Group, announced on February 27 that the company signed a product licensing agreement with Saudi National Automobiles Manufacturing Co. (SNAM) for the production of premium SsangYong pick-up model in Saudi Arabia with the aim to enter the local automotive market in 2020.
The two companies held a signing ceremony of the product licensing agreement at Seoul Office of SsangYong Motor in Korea on February 25, 2017 in the presence of SsangYong Motor CEO Choi Johng-sik and SNAM CEO Dr. Fahd S. Aldohish.
SNAM was established as an affiliate company of the Safari Group, which was the first automotive company in the Saudi Arabia. The company was built at a complete automotive complex (main plant + Tier1 suppliers) in the nation, pursuant to the Saudi Arabian government’s plan to promote the automotive industry, which is one of the core projects of the government’s national mid- to long-term development plan “Saudi Vision 2030.”
SNAM has secured a site of 1,000,000㎡ for the production of completely-built vehicles in the Jubail Industrial City and a site of 1,000,000㎡ for Tier1 suppliers for its automotive business. In a bid to pursue the first stage of the business, the Saudi company signed the licensing agreement with SsangYong.
Under the agreement, both companies will locally assemble and produce the Q200, a premium pick-up model of SsangYong, starting in 2020, gradually increasing the production to reach an annual production volume of 25,000 units.
With the product licensing agreement, SsangYong and SNAM will also hold successive discussions on the technical engineering supports for the plant construction and facility installation, parts supply and localization as well as training and educational supports for the local engineers.
Both companies will also work together to create an auto parts complex in the Jubail Industrial City to ensure a smooth vehicle production and encourage SsangYong’s suppliers to advance into the Saudi Arabian market to provide stable supply of parts with good quality for sustainable growth.
Furthermore, the two companies will strengthen their strategic partnership through close cooperation in the stages 2 and 3 of the business that will follow and be worked out in more detail after further study of the local automotive market situation.
SsangYong Motor CEO Choi Johng-sik said, “This product licensing agreement with SNAM will provide a new base for our exports in the region and help boost our global sales and future growth,” adding, “It is also significant in terms that it will not only offer a growth opportunity for our suppliers, but also they participate in the establishment of an auto parts industrial cluster.”