Homegrown auto company Mahindra & Mahindra (M&M) is looking at introducing the first product it is developing in association with Korean arm SsangYong Motor Company (SMC) in two to three years.
M&M, which bought a 70.03 per cent stake in SMC in November 2011, is developing two new platforms in collaboration with the Korean utility vehicle (UV) maker. Valued at Rs 2,100 crore, the acquisition was the largest outbound deal in the domestic automotive industry. Rajan Wadhera, chief executive (technology, product development and sourcing), M&M, said, “We are developing two platforms in collaboration with SsangYong — one in India and another in Korea.”
Based on these platforms, the products would largely be in the sport utility vehicle (SUV) space, said Wadhera. The first product is likely to be launched in two-and-a-half years. M&M — which straddles the UV segment in India with Bolero, Xylo, Scorpio and newly launched XUV500 — is looking at leveraging SMC’s strong research and development capabilities to develop products to expand its portfolio for global markets.
“We want to synergise our operations with that of SsangYong in sourcing, manufacturing and distributing products to better profitability from resulting economies of scale,” said Wadhera. SMC has a 1,300 dealer network in 98 countries.
SMC’s line-up comprises a luxury sedan, four SUVs and a multipurpose vehicle. Of these, SUV Rexton will be launched in India through the completely knocked down unit route in six months. The Korando C will follow in 2013. M&M is setting up an assembly line at its plant in Chakan, Pune, to roll out 500-600 units of the Rexton a month.
SMC products will be marketed in India through M&M’s existing retail outlets.
M&M is also considering commencing assembly operations for SMC products in Brazil, Russia and China in two years. SMC, which posted 40 per cent growth in volume, sold 113,000-114,000 units in 2011.
The company fell short of its sales target of 120,000 units due to the slowdown in its largest market, Europe. SMC is looking at boosting volumes in emerging markets, like India, Russia and China, to more than double sales to 300,000 units by 2015-16.