[THE INVESTOR] SsangYong Motor is finalizing plans to set up its Chinese joint venture with a local partner, paving the way for it to build its first manufacturing plant in the world's largest car market.
But the carmaker, owned by India's auto giant Mahindra & Mahindra, denied a news report that the joint venture will be formed in the first half of this year.
"We are in talks with our Chinese partner. But nothing has been decided yet," a SsangYong spokesperson told The Investor.
In October last year, Ssangyong signed a letter of intent with Shaanxi Auto to create a 50:50 joint venture for its overseas auto plant in Xian, Shaanxi Province, home of the Chinese partner. Under their agreement, the new plant will be constructed as early as 2019.
The automaker has been seeking to make inroads into China to tap into the largest auto market in the world. By building a production facility in China with a local partner, SsangYong can avoid hefty duties of 20 percent on imported vehicles in the country.
“A plant in China is essential for increasing sales and improving competitiveness in the rapidly growing market,” SsangYong Motor CEO Choi Johng-sik said last year.
SsangYong has also been attempting to enter the US market for a long time. The automaker said it is too early to comment on specific plans yet, adding it is still mulling the appropriate time frame for the entry.
By Ahn Sung-mi (email@example.com)