Ssangyong Motor to Build $1.2bn Factory in India image

Mahindra and Mahindra owned by South Korean car manufacturer Ssangyong Motor is planning to invest $1.2bn over the next three to five years to build a new manufacturing facility in India.

Ssangyong, which will roll out its Rexton and Korando C SUVs in India later this year, could move to manufacturing and exporting smaller compact and sub-compact SUVs being jointly developed with majority stakeholder Mahindra & Mahindra.

“We know the cost of manufacturing is lower in India, but the quality should be of international standards,” Jong-sik said.

Analysts say the company could not only save money by manufacturing in India but also gain better access to global markets. Ssangyong’s presence in India is very limited but could be helped by a focus on low pricing and products targeted to the Indian consumer – particularly the SUV, a model that has been very successful for Mahindra itself.

SsangYong Motor Company is the fourth largest Korean automobile manufacturer. Its 70% share was purchased by M&M in February 2011 after being named the preferred bidder in 2010 to acquire the bankruptcy protected company.