April 25, 2024

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[THE INVESTOR] SsangYong Motor on June 28 said it plans to clinch a deal to set up Chinese joint venture with Shaanxi Automobile Group to build its first overseas production plant in the world’s largest car market.

“There has been some delay due to the THAAD row. But we expect to sign the deal in the second half of the year,” Chung Moo-young, managing director of public relations at SsangYong, told reporters after the tour of the carmaker’s production plant in Pyeongtaek, Gyeonggi Province.

In October last year, the carmaker, owned by Indian auto giant Mahindra & Mahindra, signed a letter of intent with Chinese bus and truck maker Shaanxi Automobile Group to create a 50:50 JV for the 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 deal, however, has been delayed amid intensifying anti-Korean sentiment after Korea decided to deploy the US-led THAAD missile system. Beijing remains opposed to it, calling it a risk to its security.

SsangYong has been seeking to make inroads into China to tap its vast market. By building a production facility with a local partner, it 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.

By Ahn Sung-mi (sahn@heraldcorp.com)