Small CUV Gets Go-Ahead From Resurgent Ssangyong

After unveiling the original concept two years ago, Ssangyong green-lights the X100 cross/utility vehicle with some of the 80 billion won ($71 million) provided by parent Mahindra & Mahindra.

The small CUV will go into production at the Korean auto maker’s Pyongtaek plant in 2015, a spokesman tells WardsAuto.

The first concept version of the X100, the XIV-1, was displayed at the 2011 Frankfurt auto show. It was followed by the XIV-2 concept, as well as an extended-range hybrid, the e-XIV, at the 2012 Paris auto show. A midsize concept version, the SIV-1, was shown at this year’s Geneva auto show.

Analysts welcome the go-ahead for the X100, saying the investment underscores Mahindra’s expectations for a full recovery of Ssangyong with an earlier-than-anticipated return to profit. They believe the two auto makers have spent more than 226 billion won ($200 million) on the X100 project so far.

Without confirming the amount of its X100 investment, Mahindra does say it has spent 500 billion won ($442.5 million) on product development since it acquired Ssangyong in 2011 for 522.5 billion won ($462.4 million).

The latest investment by the Indian auto maker gives it 14.5 million new shares that increase its stake in Ssangyong from 69.3% to 72.9%, the spokesman says.

As part of the deal, Mahindra extends the maturity date of a 95.4 billion won ($84.4 million) bond from 2014 to 2015, giving Ssangyong use of the funds for an additional year before repayment.

Analysts note sales have increased steadily for Ssangyong through the first four months of 2013.

Ssangyong reported April sales of 12,607 units for its best monthly result since December 2006, with about 5,000 sold domestically and the remainder exported, including completely knocked-down units.

The spokesman confirms 460 Ssangyong workers who had been on unpaid leave since 2009 returned to work earlier this month at Pyongtaek. The employees first completed eight weeks of classes to learn the new work environment at the plant, followed by two weeks of on-site quality and safety training.

About 330 of the recalled workers are assigned to the Pyongtaek Line 3 that produces body-on-frame SUVs that include the Rexton W, Korando Sports, Actyon and Kyron models.

Bucking the trend of other Korean auto makers and their worker unions to end overnight shift work, Ssangyong management and its workers union agree to restart an overnight shift on Line 3.

Ssangyong says running a night shift for the first time since 2009 is the most productive way to re-employ the workers and achieve full annual production in the shortest period of time.

Under the new system the day shift operates for 11 hours, from 8:30 a.m. to 9 p.m., including three overtime hours. This overnight shift runs from 9 p.m. to 7 a.m., including 1.5 overtime hours and night-shift premium pay.

Ssangyong expects that the new shift arrangement and the addition of the 460 recalled workers will boost output by up to 6,000 units per month, bringing the auto maker closer to its annual production target of about 150,000.