SsangYong UK managing director Paul Williams tells just-auto that the Tivoli compact SUV is changing perceptions of the brand.
These are good times for Korean minnow (relatively speaking) brand SsangYong, part of the Mahindra Group. The resurgence from bankruptcy and an existential crisis that ended with Mahindra’s purchase in 2011 continues, reinforced by attractive new product that is lifting sales. Ssangyong recently announced that it sold its highest volume in fourteen years during 2016. During 2016, the company sold a total of 155,844 units and posted revenue of KRW3.6285tn, an operating profit of KRW28bn, and a net profit of KRW58.1bn, turning to profit for the first time since 2007.
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Tivoli is a very big part of the upbeat sales trend. Sales in 2016 increased by 7.7% over the previous year and the company’s strong growth in sales was mostly driven by the Tivoli model which grew by 34.7% year-on-year to 85,821 units. The car is helping to lift perceptions of a brand once bracketed as a niche player known chiefly for value-driven SUV and pickup workhorses.
“The Tivoli has helped to put the brand on the map in a much wider sense.”
SsangYong UK Managing Director Paul Williams maintains that Tivoli is helping to transform the company. “We have been talking internally about how the Tivoli has been acting as a catalyst for change in all sorts of ways,” he says. “One example is that when we have been advertising the Tivoli model on TV, it has had a positive effect beyond just the Tivoli range. If we look at our model lines – they are all seeing higher sales. People come into the showroom and they say ‘I didn’t know you did this’, ‘oh, can I look at a Korando’ or ‘crikey, you have got a pickup’. The Tivoli has helped to put the brand on the map in a much wider sense.”
Williams points out that the Tivoli has been something of a change of direction in the way that it has been conceived and executed as a vehicle design. “The Tivoli has probably been the first ever SsangYong that people have wanted to buy because they like it as a car with a pleasing design,” he says. “It didn’t follow an existing product line or clearly defined niche. Customers haven’t bought it because it tows, or it has seven seats, or it’s particularly good off-road, or because it’s rational and good value. Those are traditional strengths with our established model lines. With Tivoli, the driver is more ‘looks like a really nice car’. But it is also great value for money and comes with a cracking warranty – traditional brand strengths of SsangYong. We have added a new approach while retaining the strengths that are traditionally associated with the brand.”
Williams also says that it is the high-spec versions of Tivoli that have been selling most strongly in the UK. “We thought 10-20% base car, 60% mid-spec. In fact, 70% of our UK sales and orders are for the top-spec model with ‘diamond cut’ wheels, the two-tone treatment etc. And people are prepared to wait 12 weeks for the car. People waiting for SsangYongs!”
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By GlobalDataHe also sees the Tivoli’s impact on the company’s culture and maintains that the relationship with dealers is being aided by increased visibility resulting from Tivoli sales and marketing. “Tivoli has surprised us, but in a good way. It is helping us to sell other product, develop the brand and act as a catalyst for change – improve our retail network and increase it and so on. Step-by-step we are getting there.
“It helps that compact- and mid-sized SUVs are such a growth segment. Timing couldn’t be better.”
SsangYong has just had its best ever year in the UK car market, with sales up by a third to 4,444 units. Williams is pleased with the mix in the higher volume. “Yes, Tivoli is providing us with incremental growth and that’s great, but every model is seeing higher sales.”
Tivoli accounted for around 2,700 units of SsangYong’s UK total and Williams says it’s a nice and balanced portfolio. “We’re not a one-trick pony. Tivoli is actually relatively expensive to take to market. Some of our other models enjoy larger margins, so it’s important for our dealer network to get those sales too.”
He expects another record year in 2017, with around 6,000 UK sales in total.
Williams is a seasoned campaigner in the UK car market (he was previously with Mitsubishi Motors) and he appreciates the benefits of a simple proposition for the customer. He says the residual values on the Tivoli and the Tivoli XLV are very good, best in class. “If you have sensibly priced cars and good residuals, it’s easy to put PCPs together that customers can understand.
“Add that to a product that is ticking lots of boxes, is great value and is attractively styled and you’ll see strong market demand. The challenge is to build on that higher base and do that in a way that is sustainable for the brand and all parts of the business. Step-by-step, we are getting there.”
VEHICLE ANALYSIS: Tivoli and future SsangYong SUVs
