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Updated: August 26, 2013 23:23 IST

Ssangyong reworks India strategy

Ramnath Subbu
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Pawan Goenka
The Hindu
Pawan Goenka

The car-maker is exploring high volume products

Ssangyong Motors, the Mahindra & Mahindra (M&M)-owned Korean car manufacturer, is evaluating product lines to bring to the Indian market.

The company, which sells its premium sports utility vehicle (SUV) Rexton in India, is exploring high volume products for India, Pawan Goenka, Chairman, Ssangyong Motor Company, said in an interaction with The Hindu. “Rexton is a high-end SUV, and has very small volumes. We cannot build a brand around it. We have to work out the correct price positioning here, and are considering the Korando Turismo.”

The company decided against earlier plans of bringing the Korando C to India, “as the business case did not work out.”

Ssangyong, which was acquired in March 2011, is working on new products and engines with M&M. “We are working on some joint product developments which have a common platform.”

The companies are also working on smaller engines as M&M’s smallest engine is a 1.5 litre product while Ssangyong’s smallest is a 2 litre model. “The new, smaller engine family will take care of our future needs,” Mr. Goenka said.

The companies are jointly developing a platform for six engines, three each for both companies, with petrol and diesel engines of two sizes.

The Ssangyong Chairman said that the newer products that were being developed “will have more acceptability in product and pricing in India and those are the ones we are likely to bring in. The main thing that will happen will be with the newer products.”

Ssangyong’s exports to Russia account for almost half its exports. “Chile is another large market and then Western Europe. One of the thrust areas for us now is China and we want to grow it.”

The company reported a profit of 6.2 billion Korean won on sales of 907 billion won for the second quarter of 2013 largely due to higher sales from the Korando C and Korando Turismo.

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Rexton is the best product amongst competitors. However, I think some "Desi"
strategy applied for promotion of Rexton has lead to its consistently reducing market
share. I beleive Rexton has potential to sale upto 1000 units per month even during
the current economic conditions. I suggest:
i) Being a new a launch, M & M must offer 3 years, unlimited kms of warrantees to
develop confidence ( from the initial 10 months feedback, its evident that there is no
serious issue with this product)
ii) M&M should engage media campaign to show its price in Europe, UK, Russia, etc
in their currency terms and translating in current rupees vis-a-vis price of BMW X3,
Audi Q3/Q5 base models, etc. This will let domestic market think that if this SUV
would have been imported like X3/Q5, it would have also cost 33+ Lakhs.
iii) Media campaign should also compare Rexton with Parado or similar products. It
must avoid comparing with Fortuner as this is hard core SUV and Rexton is Premium/
Luxury SUV

from:  Sanjay Singh
Posted on: Aug 26, 2013 at 23:51 IST
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