|Title||SsangYong Motor Signs LOI for Joint Venture with Shaanxi Automobile Group of China|
▪ SsangYong to establish Task Force Team to study the feasibility of setting up its first overseas CBU production plant in Xi’an Economic and Technological Development Zone in Xi’an, Shaanxi Province in northwest China in a partnership with Shaanxi Automobile Group
▪ SsangYong’s decision to study a joint venture in Xi’an supported by the geographical advantage of the city’s location in the center of the Chinese mainland and a Chinese automotive market that is continuously growing
▪ With a local production facility in China, SsangYong hopes to gain new growth momentum to become a strong global SUV manufacturer
SsangYong Motor Company(CEO Choi Johng-sik; www.smotor.com/en) today announced that as part of its effort to grow in China the company signed a letter of intent (LOI) with Shaanxi Automobile Group to study feasibility for a joint venture that will establish a local production plant for CBU vehicles.
The signing ceremony, which was held in Xi’an in Shaanxi Province, China on October 11, was attended by SsangYong Motor CEO Choi Johng-sik, Xi’an Mayor Shangguan Jiqing and President of Shaanxi Automobile Group Yuan Hongming and other officials and executives from Korea and China, who witnessed the signing of a LOI.
The joint venture, if signed, will become SsangYong’s first overseas production base. The company will study feasibility of constructing production facilities for CBU vehicles and an engine in the Xi’an Economic and Technological Development Zone in Xi’an.
Furthermore, SsangYong will study to establish an automotive cluster with its major suppliers that will also enter the market, to ensure product competitiveness and start the production of SsangYong’s current models and models under development.
SsangYong has been reviewing the central and western parts of China for the establishment of its first overseas production facility taking into consideration the Chinese government’s policies and the growth potential of the Chinese automotive market.
Xi’an is a strategic bridgehead for West China Development by the Chinese government and one of the key cities in the central and western Chinese region with an excellent geographical location, industrial infrastructure and facilities, good education and human resources, which give it a comparative advantage over other regions. Due to these advantages, it is a city with great investment potential within China.
With the signing of a LOI for a joint venture, SsangYong and Shaanxi Automobile Group will form a team to work on the Xi’an project and discuss the details for the establishment of a joint venture. Next steps will also involve obtaining the approval from SsangYong’s Board of Directors, the governments of Shaanxi Province and Xi’an as well as the central government of China.
SsangYong Motor CEO Choi Johng-sik commented that “it is quite essential to have a local CBU plant in China to increase our competitiveness in the rapidly growing Chinese car market and to increase our sales volume,” adding, “Subject to feasibility study and SsangYong’s Board of Directors’ approval, the joint venture, which will be SsangYong’s first overseas production base, will serve as a new growth engine for SsangYong as the company continues its efforts to become a strong global SUV manufacturer.”