Mahindra & Mahindra’s South Korean subsidiary SsangYong is expected to miss its sales target for 2011 as the European crisis continues to affect its performance.
Europe is an important market for SsangYong, but following the debt crisis in the area the carmaker is focusing more on emerging markets like India, China and Russia in order to increase volumes in 2012. „With some of the key markets for Ssangyong going through difficult times and the tsunami in Japan in early part of 2011 which disrupted supply, SsangYong will probably sell around 113,000 to 114,000 units in 2011 as against our expectations of 120,000 units,” Pawan Goenka, president-automotive, M&M, was quoted as saying by India’s Economic Times.
Even though it will miss the target, SsangYong is still expected to post a year-on-year sales growth of 40%. The carmaker targets sales of 160,000 units by 2013 and 300,000 units by 2015-2016. According to Goenka, Mahindra’s SsangYong acquisition will break even in at least 3-4 years, with the Indian conglomerate currently in investment mode.
Focusing on emerging markets will help SsangYong decrease its exposure on developed markets, according to experts. “The biggest challenge for Ssangyong is slowing down developed markets, but the focus on the growing emerging markets such as India, China will provide a major cushion to Ssangyong,” said Umesh Karne, auto analyst with BRICS Securities.