Despite now being Chinese owned, Ssangyong Motor has dropped plans to build a joint plant in China due to strict rules on investments by foreign car firms, the chief executive of the South Korean sport utility vehicle (SUV) firm told Reuters on Tuesday.
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Ssangyong, owned by China’s Shanghai Automotive Industry Corp (SAIC), had planned to construct a joint factory with its Chinese shareholder to help it make bigger inroads into the world’s third-largest car market, the report said.
“The plan hit a snag because of strict Chinese government regulations. We are seeking a variety of alternatives,” Choi Hyung-tak, Ssangyong Motor’s CEO, told Reuters.
“We will cooperate with Shanghai (Automotive Industry), but it is not helpful for Ssangyong to set up a joint factory,” Choi reportedly added at the launch of the Rexton II, an upgraded version of its mainstay SUV.
Choi told Reuters the Chinese government had wanted Ssangyong to build a research and development centre or an engine factory to allow the company to build a car plant.
Ssangyong would put the money alloted to set up a plant in China into its current factory in South Korea, Choi reportedly said, without elaborating. The SUV maker has a car plant and an engine factory in South Korea.
According to Reuters, Choi said Ssangyong could cooperate with Shanghai Automotive in ways such as exporting knock-down vehicle assembly kits to China.
