Midweek, Wed. - Fri., September 08 - 10, 2010 Balita
India’s Mahindra vows to become global SUV player
BY JUNG HA-WON SEOUL, August 23, 2010 (AFP) – In- dian carmaker Mahindra and Mahindra said Monday it would use its purchase of South Korea’s Ssangyong Motor to become a global player in the sport utility vehicle market.
Pawan Goenka, president of Mahin-
dra’s automotive and farm sector, said the merger would help both companies expand in the global market. “We believe that Ssangyong and Mahin- dra make powerful companies to create a global SUV brand,” he told reporters after the Indian company signed a preliminary agreement to buy a controlling stake in Ssangyong.
Ssangyong, South Korea’s smallest
carmaker, is mainly a manufacturer of low- priced but robust SUVs such as “Rexton,” “Kyron” and “Actyon” that sell globally. It also makes sedans.
It was granted court protection from creditors in February 2009 after rising oil prices and slowing demand due to the global crisis hit SUV sales and former Chi- nese parent Shanghai Automotive Industry Corp declined to inject more funds.
Ssangyong has struggled to stay afloat since a violent strike over job cuts disrupt- ed production for almost 80 days last year. “Two companies are very compatible.
We have similar size and we both are very SUV-focused,” Goenka said.
The Indian firm will keep Ssangyong’s current management after the acquisition and provide “financial stability”, he said. “We need to bring Ssangyong back to its
glory. we believe it’s a very strong brand,” he said, adding Mahindra would bring in more people in research and development. Mahindra has ample cash reserves to finance the costly takeover without help from outside investors, he added. He declined to reveal the takeover cost, which analysts say will be more than 500 billion won (423.3 million dollars), or the size of the stake Mahindra will buy. Mahindra’s vice chairman and manag- ing director, Anand Mahindra, said his company had cash reserves of more than 500 million dollars. “We intend to be here as a long-term
player, so we are not looking to talk to any financiers for the purpose of financing this
acquisition,” he said. The Indian’s firm’s debt-to-equity ratio stands at 0.3 percent, one of the lowest in the industry, he said.
It plans to launch some of Ssangyong’s signature models to India, which is Asia’s third-largest car market and is enjoying robust growth, the vice chairman said. “Ssangyong Motor will have a good chance in India, where demand for sport utility vehicles is fast rising,” said Anand Mahindra.
If the deal goes through, Mahindra would become the second Indian carmaker to enter the South Korean market after Tata Motors, which bought truck maker Daewoo Commercial Vehicle in 2004. Due diligence for the Ssangyong deal is expected to begin in September. A Ma- hindra executive said earlier this month that a definitive agreement was expected in November. ■
SEOUL, September 7, 2010 (AFP) – The head of South Korea’s second-largest automaker Kia Motors has resigned to take responsibility for the recall of tens of thousands of cars over faulty electrical wiring, the company said Tuesday. Chung Sung-Eun, who is also a vice chairman of the Hyundai-Kia Automotive Group, stepped down after Kia had to issue a global recall of 85,900 vehicles, spokes- man Michael Choo told AFP.
Kia Motors boss resigns over mass recall
The four models involved are the Soul, Sorento and Borrego sport utility vehicles, and the Cadenza sedan.
In China a Kia Motors joint venture,
Dongfeng Yueda Kia Motor Co, on Mon- day separately recalled 18,147 Sorento, Borrego and Soul models. Yonhap news agency reported that Chung was sacked by group chairman Chung Mong-Koo.
Hyundai and Kia together form the
world’s fifth largest automaking group and have been pushing hard in recent years to improve quality. Kia’s second-quarter net profit this year soared 61 percent year-on-year thanks to strong sales in domestic and overseas mar- kets. It makes cars in the United States, Slo- vakia and China as well as South Korea. ■
NEW YORK, August 30, 2010 (AFP)
Fiat to return to U.S. market
you CAR CONNECTION CENTER
– American automaker Chrysler plans to sell 50,000 Fiat 500 minicars in the United States in 2011, a source told AFP on Monday, as the Italian brand returns to the US market. Fiat, Italy’s biggest car maker which controls 20 percent of Chrysler, aims at unveiling the minicar at the Los Angeles auto show in November, the source said. In a meeting with 400 of its car dealers on Monday, Chrysler said it wants to open Fiat dealerships in 165 locations across the United States with the biggest small-car markets.
“Our dealers will be able to interact with a group of individuals that are not part of their current customer base. These are individuals interested in Italian automotive design coupled with fuel efficient technol- ogy,” said Laura Soave, Head of Fiat Brand North America.
“The new Fiat retail network will begin selling the US version of the Fiat 500 late this year, and the Fiat 500 Cabrio model in 2011,” the statement said. The Fiat 500 will be built in Toluca, Mexico, while its engine will be manufac- tured in the United States, Chrylser said. ■
German car sales plunge by 27% in August
FRANKFURT, September 2, 2010 (AFP) – New car sales in Germany plunged by 27 percent last month owing to excep- tionally strong results in August 2009, data from the automakers’ federation FDA showed on Thursday.
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Exports showed a gain of 12 percent to 252,550 vehicles meanwhile, a pace that was nonetheless somewhat slower than in recent months.
For the first eight months of the year, exports gained 36 percent compared with the same period in 2009.
In Germany meanwhile, a total of 201,000 new vehicles were registered in August, a figure that compared unfavor- ably with the same month in 2009 for the ninth month running owing to a car scrapping scheme that boosted domestic sales last year.
Foreign brands took a bigger hit than German models, with a drop of 34 percent and 23 percent respectively. ■
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