Ssangyong, SAIC Plant in China Set to Launch Kyron

Ssangyong Motor Co. Ltd. and majority shareholder Shanghai Automotive Industry Corp. have completed construction of a plant in Jiangsu province, China, that will launch production of the redesigned Kyron cross/utility vehicle in first-half 2008, Ward’s learns.

Ssangyong and SAIC announced a deal in 2005 to produce the Kyron in China, but the plan stalled due to strong resistance from Ssangyong’s union, which held demonstrations outside the Chinese embassy in downtown Seoul and staged strikes at Ssangyong’s plants in Pyongtaek and Changwong, South Korea.

Union leaders were worried Kyron production would shift fully to China and other models would follow. They also said parts sourcing from China would severely impact all of Ssangyong’s domestic suppliers.

But now it appears Ssangyong’s union has been appeased, with workers this year accepting the auto maker’s wage increase offer without any strike action. Ssangyong was the first of Korea’s five auto makers this year to settle on a new contract.

SAIC, which holds a 51% stake in Ssangyong, has promised to invest 225 billion won ($2.5 billion) in the Korean auto maker to help it become more competitive. Ssangyong plans to introduce several new models in the hopes of raising global sales to 340,000 units by 2010.

Ssangyong President and CEO Choi Hyung-tak says in a statement the auto maker expects to return to profitability in 2007 after two consecutive years of losses.