SsangYong Motor Company has signed a letter of intent to establish its first overseas production plant, in China.
It is working with proposed joint venture partner Shaanxi Automobile Group to study the feasibility of a local production plant for CBU vehicles.
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The signing ceremony, which was held in Xi’an in Shaanxi Province, China on 11 October 2016, was attended by SsangYong Motor CEO Choi Johng-sik, Xi’an Mayor Shangguan Jiqing and President of Shaanxi Automobile Group Yuan Hongming and other officials and executives from Korea and China, who witnessed the signing of a LOI.
The joint venture, if signed, would be SsangYong’s first overseas production base. The company will producing completed vehicles and engines in the Xi’an Economic and Technological Development Zone in Xi’an.
SsangYong will also consider establishing an ‘automotive cluster’ with major suppliers it hopes will build factories to supply the new vehicle plant.
“SsangYong has been reviewing the central and western parts of China for the establishment of its first overseas production facility taking into consideration the Chinese government’s policies and the growth potential of the Chinese automotive market,” the automaker said in a statement.
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By GlobalDataIt described Xi’an as a strategic bridgehead for west China development by the Chinese government and one of the key cities in the central and western region “with an excellent geographical location, industrial infrastructure and facilities, good education and human resources, which give it a comparative advantage over other regions”.
Due to these advantages, it is a city with great investment potential within China.
With the LOI signed, the partners will form a team to work on the Xi’an project and discuss details of a joint venture. Additional steps will involve approval from SsangYong’s board, the governments of Shaanxi province and Xi’an as well as the Chinese central government.
SsangYong Motor CEO Choi Johng-sik said: “It is quite essential to have a local CBU (completely built vehicles) plant in China to increase our competitiveness in the rapidly growing Chinese car market and to increase our sales volume. Subject to feasibility study and SsangYong’s board approval, the joint venture, which will be SsangYong’s first overseas production base, will serve as a new growth engine for the company as it continues its efforts to become a strong global SUV manufacturer.”
