SsangYong Motor may lose third place in the Korean car market to GM Korea or Renault Samsung Motors this year.
GM Korea officially started to count sales of its new compact sport utility vehicle (SUV) Trailblazer in February and Renault Samsung Motors is also planning to launch its new XM3 in March. SsangYong Motor has no new car to release this year, so has no choice but to see GM Korea and Renault Samsung chasing it.
SsangYong sold 5,557 units in January, ranking third in the Korean market, the Korea Automobile Manufacturers Association (KAMA) said on Feb. 20. The automaker has held the third place for 13 consecutive months since January 2019.
But the pursuit of GM Korea and Renault Samsung is accelerating this year. GM Korea and Renault Samsung sold 5,101 units and 4,303 units, respectively, in January. The gap with GM Korea has narrowed to 456 units from more than 4,000 units a year ago.
Car market observers say that the rankings could be reversed in February as sales of the Trailblazer, which GM Korea launched in January, begin to be counted. The Trailblazer received much attention thanks to its wheelbase, which is largest in its category, and its reasonable price, which starts from 19,950.000 won. It is regarded as a hot new player to compete with Kia Motors' Seltos, which nabbed first place in the Korean compact SUV market.
SsangYong’s Pyeongtaek Plant has been suspended for nine days since Feb. 13 due to a disruption in component supply following the outbreak of the COVID-19 virus in China. GM Korea is not free from the situation either, but the impact on SsangYong is relatively greater than the that on GM Korea.
In the short term, GM Korea and Renault Samsung can import and sell vehicles from their parent companies. In fact, GM Korea brought in the large pickup truck Colorado and the large SUV Traverse in 2019 to offset the lack of new models. Renault Samsung is also planning to introduce six new models after launching the XM3 this year. The new models will include imported models such as the completely changed compact SUV QM3 and the third-generation model of the electric vehicle ZOE.
SsangYong is facing a different situation. Its parent company Mahindra of India is depending on SsangYong for new model development. Mahindra has purchased the platform of the compact SUV Tivoli developed by SsangYong and is paying technological fees. Based on this, SsangYong could make a turnaround for the first time in nine years in 2016, but its profitability deteriorated as subsequent new models failed to receive a good market response.
SsangYong is facing a tough road ahead as competition is heating up in the Korean car market and its financial conditions have not improved. Foreign media outlets recently reported that Mahindra has put forward a plan to invest a total of US$423 million in SsangYong for the next three years. But the company’s future remains unclear.