Korea’s Ssangyong to Sell, Build in Saudi Arabia

Korean automaker Ssangyong announces the opening of its first dealership in Saudi Arabia and reiterates its plans to launch a just-in-time joint-venture assembly plant with a local manufacturer.

A Ssangyong spokesman says the dealership in the capital city of Riyadh began selling the Tivoli small CUV and Korando compact CUV this week. Ssangyong previously exported small volumes of CUVs to Saudi Arabia, but stopped in 2013 when orders from distributors became small and irregular.

The Ssangyong store and service center in Riyadh also is expected to carry the just-launched G4 Rexton midsize CUV in the near future.

The Middle East market plays a significant role in Ssangyong’s export plans. The region accounted for 20% of the automaker’s 2016 export sales. Of the 52,200 vehicles Ssangyong exported last year, 10,500 were shipped to markets in the Middle East.

The Middle East markets included Egypt and Iran, where 2016 sales soared five to six times more than the small numbers of vehicles exported to those nations in 2015. Ssangyong exported no vehicles to Saudi Arabia last year.

While initially serving Saudi Arabia through completely built-up exports, Ssangyong’s re-entry to the market is based on a complete-knocked-down export strategy. In February, Ssangyong licensed and signed a memorandum of understanding with Saudi National Automobiles Mfg. to produce a pickup codenamed Q200 from CKD kits. The kits will ship from Ssangyong’s sole assembly plant in Pyeongtaek, Korea.

The deal calls for SNAM to be assembling the Q200 by 2020, with finished vehicles distributed to the domestic and some nearby markets in the region. Although spotted while testing in Korea, the Q200 has yet to break cover. It will replace the Korando Sports pickup and shares the platform and styling of the new G4 Rexton.

Korea has been selected as one of five strategic-partner nations to participate in Saudi Arabia’s Vision 2030 program that aims to diversify Saudi industry.

At a meeting earlier this month in Seoul, Korea’s minister of trade, industry and energy held a meeting with Saudi Arabia’s minister of energy, industry and mineral resources. They confirmed a comprehensive program under which Korea will help establish a self-standing Saudi automobile manufacturing industry.

The two Ministers discussed the possibility that the Saudi Public Investment Fund might provide financing for the new Ssangyong-SNAM assembly plant. While initially it will be a CKD assembly facility, the Saudi government wishes to expand it eventually into a CBU plant.

The memorandum signed between the two companies calls for Ssangyong to participate in design of the assembly plant. It will be located within SNAM’s 10.8 million-sq.-ft.

(1 million-sq.-m) manufacturing site which is part of the Plaschen Park industrial complex near Jubail Industrial City.

SNAM was established by Korea’s Daewoo Group. Some of its engineers and technicians undergo training at Ajou University and Ajou Motor College in Korea, which Daewoo also founded.

SNAM markets the SD 100 and SD 110 fullsize sedans and an SD 100 CUV variant in Saudi Arabia. Its website includes an application form for potential parts and service suppliers to connect with the company.